Shipments outbound from the world's second largest economy They contracted by 1.1% last month, which is the worst result since February, reports Reuters. This is an unexpected decline. In September, Chinese exports grew by 8.3 percent, and the agency's forecast for October assumed another increase, this time by 3 percent.
The result was driven by a high base from last October, when exports grew at the fastest pace in more than two years as factories began shipping supplies to major markets in anticipation of Trump's triumphant return to the White House.
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A decline in trade with the USA
Chinese exports to the United States fell by 25.17%. year-on-year, while exports to the European Union and Southeast Asian economies – large trading partners with which policymakers have sought to strengthen ties amid tariff tensions with Washington – rose just 0.9%, respectively. and 8.9 percent
Economists estimate that the loss of the American market reduced export growth by approximately 2 percentage points, or approximately 0.3%. GDP.
Woei Chen Ho, economist at UOB Singapore, said the decline in exports was due to a combination of geopolitical uncertainty and technical factors, such as additional public holidays this year during the comparable period.
“With the trade truce, we should expect the outlook to stabilize in the near term,” she said.
“In the long term, as the supply chain shifts away from China continue, as both countries try to reduce their interdependence, we will see a decline in the U.S. share of trade with China, especially in exports,” she added.
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Weak domestic demand
An additional problem for China remains insufficient domestic demand. Imports increased at the slowest pace in five months, by 1.0%. compared to 7.4 percent growth in September and a forecast growth of 3.2%.
China will aim to “significantly” increase the share of household consumption in GDP over the next five years. This plan was recently presented by the Central Committee of the Communist Party.
China's trade surplus was $90.07 billion in October, up from $90.45 billion. a month earlier and was lower than forecast at the level of USD 95.6 billion.
