China’s Trade Slump Continues as Exports Decline, Imports Miss Expectations
China’s trade data for September has shown a smaller-than-expected decline in exports, while imports fell slightly more than forecasted. According to customs data released on Friday, exports in U.S.-dollar terms fell by 6.2% last month compared to a year ago, less than the 7.6% drop forecasted by analysts. Imports also fell by 6.2% in U.S.-dollar terms, slightly more than the expected 6% decline.
China’s exports have been falling on a year-on-year basis every month since May, reflecting both lackluster global demand for Chinese goods and muted domestic demand. The country’s recovery from the pandemic also slowed in the last few months, mainly due to a slump in the massive real estate sector.
The International Monetary Fund (IMF) has trimmed its 2023 growth forecast for China to 5% from 5.2%, highlighting the ongoing impact of the real estate slump. However, the IMF has maintained its global growth forecast of 3% for the year. Last year, the world economy grew by 3.5%.
Amid rising tensions with the United States and Europe, China has been focusing on bolstering trade with regional partners in Southeast Asia and countries involved in the Belt and Road Initiative (BRI). The BRI aims to develop regional infrastructure such as ports and railways.
China has seen success in expanding its rail connections to Europe, with trains now running to 217 cities in 25 European countries. Cargo transported along these rail lines accounted for 8% of China-EU trade in 2022, up from 1.5% in 2016, according to Chinese officials. Overall, China claims that trade with Belt and Road partner countries reached $19.1 trillion between 2013 and 2022, with an average annual growth rate of 6.4%.
The third Belt and Road forum is scheduled to be held in Beijing on Tuesday and Wednesday, with the presence of Russian President Vladimir Putin expected.
China’s trade performance will continue to be closely watched as the country seeks to navigate the challenges posed by both the global economic slowdown and tensions with major trading partners. The success of regional initiatives like the BRI will play a significant role in determining China’s trade trajectory and its efforts to boost domestic demand.