Tuesday, June 18, 2024
HomeeconomyChina exports, imports fall in August as pressures persist

China exports, imports fall in August as pressures persist

BEIJING – China’s exports and imports fell in August, data showed on Thursday, as the twin pressures of sagging overseas demand and weak consumer spending squeezed businesses in the world’s second-largest economy.

While the trade numbers beat analysts’ expectations, they show China’s manufacturing sector remains under significant pressure and that policymakers will need to focus on boosting domestic demand to shore up growth, after export orders and imported parts held back factory activity in August.

Exports dropped 8.8 per cent in August year on year, Customs data showed, beating a forecast of 9.2 per cent in a Reuters poll and off a 14.5 per cent drop in July.

Meanwhile, imports contracted 7.3 per cent, slower than an expected 9 per cent decline and August’s 12.4 per cent fall.

China’s economy is at risk of missing Beijing’s annual growth target of about 5 per cent as officials wrestle with a worsening property slump, weak consumer spending and tumbling credit growth, leading analysts to downgrade forecasts for the year.

“The figures suggest the headwinds remain, despite some marginal improvement,” said Mr Zhou Hao, chief economist at Guotai Junan International.

“Looking ahead, whether China’s trade growth has already hit the bottom will hinge on several factors, the most important of which is obviously domestic demand.”

Beijing has announced a series of measures in recent months to shore up growth, with the easing of some borrowing rules last week by the central bank and the top financial regulator to provide assistance to homebuyers.

But analysts warn that the steps may have little impact with a labour market recovery slowing and household income expectations uncertain.

Crude oil shipments were 31 per cent higher in August than for the same period in 2022, and up 21 per cent on July.

Soya bean imports in August also jumped 31 per cent from a year ago, encouraged by cheap prices in Brazil.

China posted a trade surplus of US$68.36 billion (S$93.3 billion) in August, compared with a forecast US$73.8 billion and a July figure of US$80.6 billion.

“Due to the low base at the end of last year, it’s very likely for exports to return to growth at the end of this year,” said Hwabao Trust economist Nie Wen. REUTERS

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