financetom
Technology
financetom
/
Technology
/
China's exports top forecasts, imports hurt by depressed domestic demand
News World Market Environment Technology Personal Finance Politics Retail Business Economy Cryptocurrency Forex Stocks Market Commodities
China's exports top forecasts, imports hurt by depressed domestic demand
Sep 11, 2024 5:06 AM

BEIJING (Reuters) - China's exports grew at their fastest pace in nearly 1-1/2 years in August, suggesting manufacturers are rushing out orders ahead of tariffs expected from a growing number of trade partners, while imports missed forecasts amid weak domestic demand.

The mixed trade data highlights the challenge facing Beijing as policymakers try to bolster overall growth without becoming too reliant on exports especially given the tightening of consumers' purse strings.

China's economy has failed to fire over the past year amid a prolonged property sector downturn, and a survey last week showed exports in the doldrums and factory gate prices at their worst in 14 months, pointing to producers slashing prices to find buyers.

Outbound shipments from the world's second-largest economy grew 8.7% year-on-year in value last month, the quickest since March 2023, customs data showed on Tuesday, beating a forecast 6.5% increase in a Reuters poll of economists and a 7% rise in July.

But imports increased by just 0.5%, missing expectations for a 2% boost and down from the 7.2% growth a month prior.

"The strong export performance and trade surplus is favourable to economic growth in the third quarter and whole year," said Zhou Maohua, a macroeconomic researcher at China Everbright Bank.

"However, the global economic and geopolitical environment is complicated and China's exports face a lot of headwinds," he added.

Economists have warned that Beijing risks undershooting its growth target if it becomes too reliant on exports, following a series of recent lacklustre data, raising pressure on policymakers for more stimulus to revive China's economy.

TRADE BARRIERS

Moreover, mounting trade barriers are emerging as another significant obstacle, threatening China's price-driven export momentum.

China's trade surplus with the United States widened to $33.81 billion in August from $30.84 billion in July. Washington has repeatedly highlighted the surplus as evidence of the one-sided trade favouring the Chinese economy.

Brussels' trade policy has turned more protective too, and Beijing's efforts to negotiate with the European Union to ease tariffs on Chinese electric vehicles (EV) have made little headway.

And Canada last month announced a 100% tariff on Chinese EVs, along with a 25% tariff on Chinese steel and aluminium.

As China attempts to pivot and direct more exports to Southeast Asia and South Asia, it is also facing push back there.

India is planning to raise tariffs on Chinese steel, Indonesia is eyeing heavy duties on textile imports, and Malaysia opened anti-dumping investigations into plastic imports from China and Indonesia.

Still, some analysts expect outbound shipments to ride out the storm, given the relative inexpensiveness of China's yuan and the relative ease with which exporters can re-route their wares to avoid the tariffs.

"Outbound shipments are likely to remain strong in the coming months. Admittedly, more barriers are being erected," said Zichun Huang, China Economist at Capital Economics.

"We doubt the tariffs announced so far will prevent real effective exchange rate declines from fuelling further gains in China's global export market share," she added.

SLOW IMPORTS

The lower-than-expected imports might not bode well for exports in the coming months, as just under a third of China's purchases are parts for re-export, particularly in the electronics sector.

China's commodities purchases also pointed to a bleak domestic picture, with the Asian giant's iron ore imports down 4.73% from a year earlier last month, as weak demand in the country's construction sector pinched steelmakers.

Furthermore, while China bought in a record 12.14 million metric tons of soybeans in August, there were ominous signs for the production powerhouse's future export performance.

Analysts say the buying spree was motivated by traders taking advantage of lower prices to stock up amid concerns trade tensions with the U.S. could intensify if Donald Trump returns to the White House next year.

Comments
Welcome to financetom comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
Related Articles >
Crude oil price forecast update 06-05-2024
Crude oil price forecast update 06-05-2024
May 6, 2024
Crude Oil Price Analysis Crude oil price fluctuates positively to approach testing the key resistance at 79.60$. As mentioned this morning, the price needs to hold below this level to keep the correctional bearish trend active. Breaching the resistance represents the key to start recovery attempts and achieve gains that reach 81.50$ initially. The EMA50 supports the suggested bearish wave....
The Analyst Landscape: 4 Takes On SolarWinds
The Analyst Landscape: 4 Takes On SolarWinds
May 6, 2024
4 analysts have expressed a variety of opinions on SolarWinds ( SWI ) over the past quarter, offering a diverse set of opinions from bullish to bearish. In the table below, you'll find a summary of their recent ratings, revealing the shifting sentiments over the past 30 days and comparing them to the previous months. Bullish Somewhat Bullish Indifferent Somewhat...
Brent oil price forecast update 06-05-2024
Brent oil price forecast update 06-05-2024
May 6, 2024
Brent Oil Price Analysis Brent oil price is affected by stochastic positivity, trading positively and approaching testing the 84.77$ level. As long as the price is below this level, our bearish overview will remain valid for today. This bearish view is affected by the previously completed double top pattern. We are waiting to test 82.40$ as the first main target....
Cohu Stock: A Deep Dive Into Analyst Perspectives (4 Ratings)
Cohu Stock: A Deep Dive Into Analyst Perspectives (4 Ratings)
May 6, 2024
Analysts' ratings for Cohu ( COHU ) over the last quarter vary from bullish to bearish, as provided by 4 analysts. The table below offers a condensed view of their recent ratings, showcasing the changing sentiments over the past 30 days and comparing them to the preceding months. Bullish Somewhat Bullish Indifferent Somewhat Bearish Bearish Total Ratings 3 0 1...
Copyright 2023-2026 - www.financetom.com All Rights Reserved