China’s exports and imports have grown at their slowest pace in four months in August dragged by an inflation-driven slump in overseas demand and a disrupted domestic output due to COVID-19 lockdowns and heatwaves.
Exports grew 7.1% in August compared to a year earlier, down from an 18% gain in July, reported Reuters, well below analysts’ expectations of a 12.8% rise.
Imports remained tepid, growing only 0.3% in August compared to 2.3% in July, against a forecast for a 1.1% rise, according to the report.
As a result, the trade surplus narrowed to $79.39 billion, compared with a $101.26 billion surplus in July — a record figure for a single-month goods trade balance for any nation in history — reported Reuters.
Subdued Demand: A notable factor would be that despite the yuan falling to a two-year low, China’s exports have not received any substantial boost. This clearly reflects that demand remains sluggish in overseas markets.
Part of that could be attributed to a fall in domestic output, disrupted by lockdowns. Export hub Yiwu mandated a three-day lockdown in early August to contain a COVID outbreak, disrupting local shipments and delivery of Christmas goods during the peak season, reported Reuters.
Expert Take: Bruce Pang, a chief economist at Jones Lang Lasalle told Reuters the remarkably slower imports growth indicated the sector has faced a wave of headwinds in recent months, which is not expected to ease anytime soon. “Power rationing measures hurt production. The broad dollar strength also brings pressure on imports,” he said.
Image and article originally from www.benzinga.com. Read the original article here.