China’s export growth sinks in August, imports shrink

China’s trade weakened in August as high energy prices, inflation and anti-virus measures weighed on global and Chinese consumer demand, while imports of Russian oil and gas surged, the Associated Press reported.
Exports rose 7% over a year ago to $314.9 billion, decelerating from July’s 18% expansion, customs data showed Wednesday. Imports contracted by 0.2% to $235.5 billion, compared with the previous month’s already weak 2.3% growth.
Demand for Chinese exports has softened as Western economies cool and the Federal Reserve and central banks in Europe and Asia raise interest rates to contain surging inflation. At home, repeated closures of Chinese cities to fight virus outbreaks has weighed on consumers’ willingness to spend.
“The slowdown in China’s export sector is adding to headwinds for the Chinese economy,” said Rajiv Biswas of S&P Global Market Intelligence in a report. Lack of import growth highlights “continued weakness of Chinese domestic demand.”
Growth in the world’s second-largest economy fell to 2.5% in the first half of 2022, less than half the ruling Communist Party’s 5.5% annual target, after Shanghai and other industrial centers were shut down to fight virus outbreaks.
Factories have reopened, but restrictions more recently in areas including the southern business center of Shenzhen weighed on activity. So has a dry summer that left reservoirs in the southwest unable to generate hydropower and disrupted river shipping.
The International Monetary Fund and private sector forecasters have trimmed their already low growth forecasts.
China’s global trade surplus widened by 36.1% over a year earlier to $79.4 billion.