China's economy faces uncertain recovery prospects as exports plummet

China's exports continued to fall in October, pointing to continued weakness in external demand and growing uncertainty over the economic recovery.

Xuất khẩu sụt giảm sâu, kinh tế Trung Quốc đứng trước triển vọng phục hồi mịt mờ

China's total trade surplus in October stood at $56.5 billion, down significantly from $77.71 billion in September. (Source: Xinhua)

China's General Administration of Customs said on November 7 that exports fell for the sixth consecutive month in October, to $274.8 billion, down 6.4 percent year-on-year.

The decline accelerated from a 6.2% decline in September, which was below survey expectations, according to Chinese financial data provider Wind. Meanwhile, imports rose 3% last month to $218.3 billion, beating Wind's expectations.

Beijing has announced a series of stimulus measures since the summer to revive flagging economic growth, but the overall recovery remains fragile, with asset write-offs continuing and local government debt posing a major risk to the economy.

Xu Tianchen, an economist at the prestigious British forecasting and consulting organization EIU, said: "The export data shows uncertainties regarding the recovery of external demand. The increase in imports may indicate a recovery in domestic demand, but the recovery will be moderate due to the weak exchange rate."

Soybean imports rose 14.6% in the first 10 months of the year by volume from the same period last year, while crude oil imports rose 14.4% and coal purchases increased 66.8% over the same period.

The Canton Fair, a gauge of China's export resilience, also fell short of expectations, with transactions failing to return to pre-pandemic levels when the fair concluded its latest session on November 4 in Guangdong province.

China's total trade surplus in October stood at $56.5 billion, down significantly from $77.71 billion in September.

“Export growth remains sluggish due to slowing economic growth in the US and Europe. External demand is likely to weaken further in the next six months,” said Zhang Zhiwei, president and chief economist at Pinpoint Asset Management.

According to this expert, China is having to rely more on domestic demand to promote growth.

"The recovery in import growth was a positive surprise. It is unclear whether this recovery indicates that domestic demand has improved. We need to monitor other data points, such as retail sales. However, as fiscal policy becomes more proactive, domestic demand is likely to recover in the coming months," Zhang forecast.

Source