Ellen Zhang and Ryan Woo
BEIJING (Reuters) – China’s exports and imports unexpectedly contracted in October, the first synchronized decline since May 2020, as soaring inflation and rising interest rates hit global demand, while new domestic COVID- 19 containment measures disrupted output and consumption.
Dismal October trade data underscored the challenges facing Chinese policymakers as exports have been one of the few bright spots in the struggling economy.
Exports contracted in October Official data showed on Monday that they rose 0.3% from a year earlier, a sharp rebound from September’s 5.7% increase and well below analysts’ expectations for a 4.3% increase. This was the worst performance since May 84.
Data suggest demand remains generally weak, putting more pressure on the country’s manufacturing sector and threatening any meaningful economic recovery in the face of continued COVID-19 74 restrictions, prolonged housing weakness and global recession risk.
Chinese exporters were unable to even take advantage of further yuan depreciation and the crucial year-end shopping season, underscoring the mounting pressure on consumers and businesses around the world.
“The weak export growth may reflect weak external demand and supply disruptions caused by the COVID outbreak,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management, citing COVID disruptions at Apple’s main supplier Foxconn’s factory in Zhengzhou Just one example.
Apple Inc (NASDAQ: AAPL ) said it expects lower-than-expected shipments of high-end iPhones model after a major production cut at a virus-affected factory in China.
“Looking ahead, we believe exports will decline further in the coming quarters,” said Capital Economics economist Huang Zichun. The shift in global consumption patterns that drove up consumer demand during the pandemic is likely to continue easing. “
Further import weakness
The pandemic Containment policies, which have taken a heavy toll on the economy and caused widespread frustration and fatigue.
Weak October factory and trade data suggest that the world’s second-largest economy is in
is struggling to get out of the quagmire in the final quarter, after reporting a faster-than-expected rebound in the third quarter.
Chinese policymakers last week pledged to prioritize economic growth and advance reforms, Allayed concerns that ideology may take precedence over President Xi Jinping as Xi begins a new leadership term with destructive lockdowns continuing without a clear exit strategy.
Domestic demand is tepid, affected by Imports were also hurt by the drag from new COVID containment and lockdowns in October’s and a cooling housing market.
Inbound shipments fell 0.7% from September’s 0.3% gain, less than expected 0.1% increase – weakest result since August 2020.
China’s soybean imports fell, coal Imports slipped as domestic output was disrupted by strict pandemic measures and a slump in the housing market.
Overall trade data led to a slightly wider trade surplus 74.14 billion dollars, compared to dollars .74 September was $1 billion, lower than expected 95.95 billion.