Doubts about the world economy due to the rise in rates and high inflation are reflected in trade data. China announced this Thursday the biggest drop in its exports in three years, according to data from the Asian country’s General Administration of Customs.
The shipment of goods abroad fell by 12.4% measured in dollars in June, more than expected by analysts (9.5% in a Reuters poll). Imports were also 6.8% lower and worse than anticipated (-4%).
By selling more than it matters, it has achieved a surplus of 68.5 billion dollars, about 61.5 billion euros, but it is 24% less than a year ago.
In a press conference held in Beijing, Lyu Daliang, spokesman for the General Administration of Customs, blamed the poor export performance on “the weak global economic recovery, the slowdown in global trade and investment and the rise of unilateralism, protectionism and geopolitics”. In the first half of the year, trade denominated in dollars reflects a global drop of 4.7%. Imports experienced a greater decrease (-6.7%) than exports (-3.2%).
The figure is a thermometer of global trade flows, as the Asian country is one of the largest suppliers and producers on the planet. The momentum of China’s post-pandemic recovery has slowed after the rapid rebound in the first quarter. Analysts have revised down their economic forecasts for the rest of the year, as factory output slows due to persistently weak global demand.
The figures are somewhat lower if measured in yuan. Exports fell by 8.3%, but adding the impact of the exchange rate in dollars reduced the aforementioned 12.4%.
China would grow 3% this year, a rate that represents half of the increases of previous years and would be below the 5% set as the target. So while it’s an enviable growth, it looks very subdued. Chinese Premier Li Qiang, in office since March, has talked numerous times about taking regulatory measures to boost demand and invigorate markets, but few concrete measures have been announced, making investors impatient.
“Headwinds from the foreign sector remain strong, requiring demand support measures,” said Zhou Hao, an economist at Guotai Junan International.
