A cargo ship carrying containers is seen near the Yantian port in Shenzhen, following the novel coronavirus disease (COVID-19) outbreak, Guangdong province, China May 17, 2020.
Martin Pollard | Reuters
China’s exports fell by 0.3% in October from a year ago in U.S.-dollar terms, missing Reuters expectations for a 4.3% increase.The drop marked a sharp decline from a 5.7% year-on-year increase in September, and the first year-on-year drop since May 2020, according to Refinitiv Eikon data.
Imports fell in October by 0.7% in U.S.-dollar terms, also missing expectations for slight growth of 0.1% and down from a 0.3% increase in September.
China’s exports to the U.S. fell by 12.6% in October from a year ago, a third-straight month of decline, according to CNBC calculations of U.S.-dollar customs data.
The U.S. is China’s largest trading partner on a single-country basis, the data show.
China’s exports to the European Union fell by 9% in October, after growing in September.
However, China’s exports to the Association of Southeast Asian Nations — the country’s largest trading partner by region — jumped by about 20% in October.
China’s global exports of household appliances plunged by more than 20%, that of toys fell by nearly 18% and shoes by nearly 11%.
The country’s car exports did surge by 60% in October to 352,000 units, the data showed.
China’s crude oil imports surged by 14% from a year ago, while that of coal was up 8%. But imports of natural gas fell by nearly 19%.
In addition to ongoing Covid controls, last month marked the Chinese Communist Party’s twice-a-decade congress at which President Xi Jinping consolidated his power.
Global demand wanes
Prospects of an economic downturn in the EU and the U.S. have increased in the last few months. Many large American tech companies have recently announced layoffs and other cost-cutting measures.
“High inflation erodes the purchasing power of consumers overseas,” Hao Zhou, chief economist at Guotai Junan International, said in a note. “As monetary policy will go deeper into restrictive territory, the risk of economic recession overseas will rise, considerably weighing on global demand. Thus, China’s exports may come under pressure.”
The slump in China’s exports came despite a stronger U.S. dollar.
The U.S. Federal Reserve’s aggressive interest rate hikes have strengthened the greenback against other currencies. The yuan weakened by nearly 3% against the U.S. dollar in October, according to Refinitiv Eikon.
In yuan terms, exports rose by 7% and imports by 6.8%, customs data released Monday showed.
In another sign of falling global demand, South Korea’s exports fell in October for the first time in two years, down by 5.7% year-on-year, Larry Hu, chief China economist at Macquarie, pointed out in a note Sunday. He said that Korean export growth is a leading indicator for the Asia supply chain.