China trade falls on weak global demand, virus curbs
China’s trade shrank in October as global demand weakened and anti-virus controls weighed on domestic consumer spending.
Exports declined 0.3 per cent from a year earlier to US$298.4 billion, down from September’s 5.7 per cent growth, the customs agency reported Monday. Imports fell 0.7 per cent to US$213.4 billion, compared with the previous month’s 0.3 per cent expansion.
China’s global trade surplus edged up 0.9 per cent from a year earlier to US$85.2 billion.
Forecasters expected Chinese trade to weaken as global demand cooled following interest rate hikes by the Federal Reserve and other central banks to rein in surging inflation.
At home, consumer demand has been hurt by a ‘zero COVID’ strategy that has repeatedly shut down large sections of cities to contain virus outbreaks. That has disrupted business and confined millions of people to their homes for weeks at a time.
Economic growth picked up to 3.9 per cent over a year earlier in the quarter ending in September from 2.2 per cent in the first six months of 2022. But forecasters say activity is weakening as closures spread in response to a spike in infections.
“The economy slowed again in October due to the tightened COVID controls as well as the slowing external demand,” said Larry Hu of Macquarie Group in a report.
The downturn in Chinese demand hurts developing countries that supply oil, soybeans and other raw materials and the United States, Europe, Japan and other suppliers of consumer goods and microchips and other components and technology needed by manufacturers.
Exports to the United States rose 35.3 per cent over a year earlier to US$47 billion despite lingering tariff hikes in a trade war over Beijing’s technology ambitions. Imports of US goods rose US$52.4 per cent to US$12.8 billion.
China’s politically sensitive trade surplus with the United States swelled 29.9 per cent to US$34.2 billion.
Imports from Russia, mostly oil and gas, more than doubled, rising 110.5 per cent over a year ago to US$10.2 billion.
China can buy Russian energy exports without running afoul of sanctions imposed on President Vladimir Putin’s government by the United States, Europe and Japan. Beijing is stepping up purchases to take advantage of Russian discounts. That irks Washington and its allies by topping up the Kremlin’s cash flow and limiting the impact of sanctions.
Exports to the 27-nation European Union edged up 5.5 per cent to US$44.1 billion while imports of European goods shrank 15.5 per cent to US$21.4 billion. China’s surplus with the EU widened by 38.1 per cent to US$22.7 billion.
For the first 10 months of the year, China’s exports rose 11.1 per cent to US$3 trillion while imports gained 3.5 per cent to US$2.3 trillion, the General Administration of Customs announced. The country’s trade surplus was US$727.7 billion.