China’s imports rose in October while exports fell for a sixth straight month compared with a year earlier in the latest evidence the world’s second largest economy remains in the doldrums.
Customs data released yesterday showed imports climbed 3% from a year earlier to $218.3 billion, while exports fell 6.4% to $274.8 billion. The trade surplus of $56.5 billion was down more than 30% from $77.7 billion in September and was a 17-month low.
Exports had fallen 6.2% year-on-year in September.
Exports may fall further still, said Julian Evans-Pritchard of Capital Economics.
“We expect exports to decline over the coming months before bottoming around the middle of next year. Measures of foreign orders hint at a more significant drop in foreign demand than what has so far been observed in the customs data,” he said in a report.
Overall, China’s foreign trade has remained sluggish this year as global demand has slackened and a recovery has stalled despite the country’s reopening after its strict COVID-19 controls were lifted late last year.
Demand for Chinese exports has weakened since the Federal Reserve and central banks in Europe and Asia began raising interest rates last year to cool inflation that was at multi-decade highs.
Total trade in January-October, including both imports and exports, rose a mere 0.03%, yesterday’s data showed.
At the same time, imports have remained weak. October’s 3% increase was the first monthly increase since September 2022, and a big improvement from a 6.2% decline in September.
Major contributors to that increase included soybeans and crude oil, as well as intermediate products such as electronic components used in manufacturing.
Trade with Japan, Southeast Asian countries, the European Union and the U.S. has declined this year.
China’s property sector remains a drag on the economy, with sales slumping and developers struggling to repay massive amounts of debt.
The central bank has eased borrowing rules and cut mortgage rates for first-time home buyers while providing some tax relief measures for small businesses. Late last month, it announced plans to issue 1 trillion yuan ($330 billion) in bonds for infrastructure projects and disaster prevention, dipping deeper into deficit to try to nudge the economy into higher gear.
The data were released as China was holding its annual International Import Expo in Shanghai. The event has drawn thousands of foreign businesses shopping for Chinese products and looking to expand their own trade and investment in the huge market of 1.4 billion people.
Albanese for free trade
In opening the event during the weekend, Chinese Premier Li Qiang sought to reassure foreign companies that the country remains eager to attract more foreign investment. He promised to relax curbs on market access and protect the rights of foreign companies and to “continue to create a market-oriented, legal, and international business environment.”
China and Australia were meanwhile holding talks yesterday on how to revive their trade ties. In the first visit by an Australian prime minister in seven years, Prime Minister Anthony Albanese called for the “full resumption of free and unimpeded trade” with China.
The two sides are working to restore trade links blocked for years due to economic and political tensions. More than 200 Australian companies were represented at the fair.
China’s imports from Australia have risen 8.4% this year, while exports to Australia have fallen 4.2%.
Trade with Russia has surged, with imports of oil and other commodities jumping 12.4% as meanwhile exports to Russia surged more than 52%.
Money has been flowing out of China seeking higher returns in places where interest rates have risen. The government reported earlier that foreign direct investment fell nearly $12 billion in July-September compared with a year earlier in the first such quarterly drop since the State Administration of Foreign Exchange began reporting the data in 1998. MDT/AP
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