Chinese exports decline in June as economic problems mount

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China’s exports have suffered their biggest year-on-year decline since the start of the coronavirus pandemic, raising concerns over the growth path of the world’s second-largest economy.

Official data on Thursday showed June exports fell 12.4 per cent year-on-year in dollar terms, the biggest drop since February 2020. Economists polled by Reuters expected a decline of 9.5 percent.

Imports fell 6.8 percent, more than expected. Exports and imports declined by 7.5 per cent and 4.5 per cent respectively in May.

China’s exports have been hit this year by weak international demand, at a time when the economy is already strained by a struggling property sector and a disappointing comeback after Covid-19 controls were lifted at the start of the year.

Youth unemployment also hit its highest point since China began providing data in 2018, while weak consumer demand helped push the country to the brink of deflation.

“China will have to rely on domestic demand,” said Ziwei Zhang, president of Pinpoint Asset Management. “The big question over the next few months is whether domestic demand can pick up again without more stimulus from the government.”

The General Administration of Customs said on Thursday that trade growth faced “relatively great pressure” and cited economic and geopolitical risks. It said yuan-denominated exports increased by 3.7 percent in the first half of the year.

Gross domestic product data to be released on Monday will shed further light on the health of the Chinese economy. The government has set an official growth target of 5 per cent for the full year, after recording only 3 per cent growth in 2022, its lowest level in decades. Premier Li Qiang said last month that the second quarter performance would surpass the first quarter. rate of 4.5 per cent.

Policymakers in China have so far held off on massive stimulus, instead easing key interest rates last month to support growth. He has also introduced cautious measures to support the property industry, which accounts for more than a quarter of economic activity but is battling a wave of defaults.

You are viewing a snapshot of an interactive graphic. This is probably due to being offline or JavaScript is disabled in your browser.

Inflation data this week showed the country was at the peak of consumer price deflation, meaning household spending remained weak for months after the anti-Covid regime was abandoned. Factory gate prices are already in negative territory.

After an initial decline, China’s exports grew in the early stages of the pandemic as consumption in other countries shifted towards goods and away from services. Official data often shows double-digit percentage growth.

You are viewing a snapshot of an interactive graphic. This is probably due to being offline or JavaScript is disabled in your browser.

Thursday’s data showed a reversal, with broad-based declines in all categories, including exports of mobile phones, computers, steel and clothing.

The one exception was car exports, which increased by $4.1 billion compared to the same period the previous year.

Exports to Russia and Singapore also increased in dollar value terms, but goods declined in all other major economies.

GET FREE CHINESE BUSINESS UPDATES

we will send you one myFT Daily Digest Latest Email Rounding sugar trade News every morning.

China’s exports have suffered their biggest year-on-year decline since the start of the coronavirus pandemic, raising concerns over the growth path of the world’s second-largest economy.

Official data on Thursday showed June exports fell 12.4 per cent year-on-year in dollar terms, the biggest drop since February 2020. Economists polled by Reuters expected a decline of 9.5 percent.

Imports fell 6.8 percent, more than expected. Exports and imports declined by 7.5 per cent and 4.5 per cent respectively in May.

China’s exports have been hit this year by weak international demand, at a time when the economy is already strained by a struggling property sector and a disappointing comeback after Covid-19 controls were lifted at the start of the year.

Youth unemployment also hit its highest point since China began providing data in 2018, while weak consumer demand helped push the country to the brink of deflation.

“China will have to rely on domestic demand,” said Ziwei Zhang, president of Pinpoint Asset Management. “The big question over the next few months is whether domestic demand can pick up again without more stimulus from the government.”

The General Administration of Customs said on Thursday that trade growth faced “relatively great pressure” and cited economic and geopolitical risks. It said yuan-denominated exports increased by 3.7 percent in the first half of the year.

Gross domestic product data to be released on Monday will shed further light on the health of the Chinese economy. The government has set an official growth target of 5 per cent for the full year, after recording only 3 per cent growth in 2022, its lowest level in decades. Premier Li Qiang said last month that the second quarter performance would surpass the first quarter. rate of 4.5 per cent.

Policymakers in China have so far held off on massive stimulus, instead easing key interest rates last month to support growth. He has also introduced cautious measures to support the property industry, which accounts for more than a quarter of economic activity but is battling a wave of defaults.

You are viewing a snapshot of an interactive graphic. This is probably due to being offline or JavaScript is disabled in your browser.

Inflation data this week showed the country was at the peak of consumer price deflation, meaning household spending remained weak for months after the anti-Covid regime was abandoned. Factory gate prices are already in negative territory.

After an initial decline, China’s exports grew in the early stages of the pandemic as consumption in other countries shifted towards goods and away from services. Official data often shows double-digit percentage growth.

You are viewing a snapshot of an interactive graphic. This is probably due to being offline or JavaScript is disabled in your browser.

Thursday’s data showed a reversal, with broad-based declines in all categories, including exports of mobile phones, computers, steel and clothing.

The one exception was car exports, which increased by $4.1 billion compared to the same period the previous year.

Exports to Russia and Singapore also increased in dollar value terms, but goods declined in all other major economies.