China’s export growth slows amid rising trade tensions

China’s export growth decelerated significantly in September, while imports also fell short of expectations. This suggests that manufacturers are reducing prices to clear inventory ahead of potential tariffs from several trading partners.

Export momentum had been a bright spot for the Chinese economy, which has faced challenges from weak domestic demand and a property market debt crisis. The slower-than-expected export growth underscores the need for stronger economic stimulus.

Outbound shipments from China grew by 2.4 per cent year-on-year in September, the slowest pace since April. This missed the forecast of 6.0 per cent and the previous month’s 8.7 per cent increase.

Imports rose by a mere 0.3 per cent, falling below expectations of 0.9 per cent and the previous month’s 0.5 per cent growth. The weak import data suggests that exports may face further challenges in the coming months, as a significant portion of China’s imports are components for re-export, particularly in the electronics sector.

China’s overall trade surplus narrowed to $81.71 billion in September, down from $91.02 billion in August. Manufacturing activity also contracted sharply in September, according to a survey of factory owners.

Attribution: Reuters

Subediting: M. S. Salama