China exports dive on weak global demand BEIJING: China’s exports plummeted in September, data showed Thursday, as anaemic global demand dealt another blow to the world’s second-largest economy, while weak imports fuelled worries about crucial domestic appetite.
The figures will come as a disappointment after a recent batch of healthy statistics, and suggest the Asian giant and key driver of the global economy is yet to see the bottom of a years-long growth slowdown.
China’s performance affects partners from Australia to Zambia, which have been battered as its expansion has slowed to levels not seen in a quarter of a century.
Customs said exports sank 10 per cent year-on-year in September to $184.5 billion, while imports fell 1.9pc to $142.5bn.
“There remain obvious obstacles facing China’s foreign trade development,” Customs spokesman Huang Songping told reporters in Beijing. “World growth remains sluggish and global trade lacks effective support.” Both readings missed expectations, with a Bloomberg News survey of economists forecasting a drop of 3.3pc for exports and a 0.6pc rise in imports.
The figures are likely to put further pressure on China’s yuan currency, which hit six-year lows against the US dollar this week.
The trade surplus declined to $42bn, down around $10bn month-on-month, which analysts from ANZ said could weigh on the yuan exchange rate, “particularly in the face of a stronger” dollar.
“Against the backdrop of an ongoing capital account deficit, the trade surplus has been an important factor in offsetting capital outflows. But the contraction in exports may continue to see the trade surplus narrow,” they said.
Analyst Julian Evans-Pritchard of Capital Economists said the results were “much weaker” than expected, noting that persistently “sluggish global demand” dragged on exports, and that the decline in imports raised questions about the strength of recovery in China’s domestic demand.
In August China’s imports beat expectations and broke a two-year losing streak, posting a 1.5pc annual increase.
But last month’s return to negative territory, with drops in import volumes of iron ore and copper, could be “an early sign that the recent recovery in economic activity is losing momentum”, Evans-Pritchard said. However, he warned against “reading too much into a single data point”.
The weak data underscored that any recovery in global demand was going to be “gradual and susceptible to setbacks”, said Louis Kuijs of Oxford Economics.
Looking ahead, the world’s largest trader in goods faces headwinds due to “downside risks stemming from the US election” and Britain’s EU exit, the ANZ analysts said.