China Exports, Imports Unexpectedly Shrink in Oct Amid COVID Disruptions
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By Ambar Warrick
Investing.com— China’s trade balance was lower than expected in October, data showed on Monday, as COVID-linked disruptions and slowing global demand for Chinese goods saw both exports and imports contract.
China’s trade balance was $85.15 billion in October, data from the General Administration of Customs showed, far lower than expectations for $95.95 billion, but slightly higher than September’s reading of $84.74 billion.
But the country’s exports shrank 0.3%, falling for the first time since June 2020, as sluggish global economic trends, due to rising interest rates and inflation, weighed on demand for Chinese goods. Analysts were expecting growth of 4.3%, down from September’s reading of 5.7%.
Chinese imports also shrank 0.7%, falling for the first time since April as renewed COVID-related disruptions severely dented local demand for goods. Analysts were expecting imports to barely expand by 0.1%.
China’s massive trade surplus saw a sharp decline this year, as the country struggles to navigate continued headwinds from COVID-19.
China’s zero-COVID policy is at the heart of its economic woes this year, as a series of lockdowns in major economic hubs ground growth to a halt. The country recently reiterated its commitment to the policy, brewing more uncertainty over its economic prospects this year.
The yuan reacted negatively to the trade data, falling 0.5%, while the offshore yuan traded 0.7% lower. The currency has been hit hard by a Chinese economic slowdown this year, and was near its weakest level since the 2008 financial crisis in onshore trade.
Recent data showed that Chinese business activity unexpectedly shrank in October, largely due to COVID disruptions.
Softening global economic activity has also dented China’s exports, particularly to destinations in Europe and the U.S.
But the country has rolled out a slew of stimulus measures to help support local industries, which also helped third-quarter GDP beat expectations. But the outlook for the Chinese economy remains dim.
