China
China export suffers first drop in 2 years
Beijing: China’s exports declined by 0.3 per cent in October compared with a year earlier, down from 5.7 per cent growth in September, it was reported on Monday.
Imports also declined by 0.7 per cent in October compared with a year earlier, down from 0.3 per cent growth in September, the South China Morning Post said.
Momentum from China’s coronavirus-triggered exports boom is expected to weaken further in the coming months after shipments in October fell for the first in more than two years amid dwindling external demand and further fallout from the zero-Covid policy, it said.
Exports fell considerably short of expectations of continued growth and contracted by 0.3 per cent last month from a year earlier to $298.37 billion, compared with 5.7 per cent expansion in September, according to data released by China Customs on Monday.
“This marks a turning point for export growth, as the minus 0.3 per cent reading is the first negative print since May 2020,” said Nomura economists led by Lu Ting.
“Although China’s exports may benefit from a weak (yuan) and (producer price index) deflation, those benefits could be more than offset by a global slowdown.”
Export growth will, according to Nomura, slip further to around minus 4 per cent year-on-year in the last two months of the year, the Post said.
"As strong export growth has been the single-largest(GDP) growth driver in China since spring 2020, the contraction of exports will inevitably weigh on growth, employment and investment, while it may also prompt Beijing to reconsider its zero-Covid strategy and property curbs,” Nomura added.
“Nevertheless, we continue to expect no major policy changes on zero-Covid strategy and the property sector at least until March 2023.”
The 10 countries of the Association of Southeast Asian Nations (Asean) continued to be China’s largest trade partner, followed by the European Union and the United States.
Last week, data had already shown that both China’s factory and services activity contracted in October, pointing to a “further loss of momentum” as coronavirus disruptions worsened and export orders remained under pressure, the report said.
(With UNI inputs)
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