China exports drop a 7th straight month in Oct
Chinese exports sank for a seventh consecutive month in October, data showed yesterday, as weak global demand dealt a blow to the world’s number two economy following recent signs of stability. The result, which also missed forecasts, comes as the country’s export-oriented companies see their margins squeezed by rising labor costs and increasing competition from southeastern Asian countries.
Overseas shipments fell 7.3 percent onyear, while imports also fell 1.4 percent, with both coming in below expectations in a survey of economists by Bloomberg News.
China is the world’s biggest trader in goods and its performance affects partners from Australia to Zambia, which have been battered as its expansion has slowed to levels not seen in a quarter of a century. With exports totalling $178.2 billion and imports $129.1 billion the trade surplus dropped to $49.1 billion in the month.
Customs earlier gave the figure in yuan terms, showing a 3.2 percent drop in exports and a 3.2 percent increase in imports on-year.
Analyst Julian Evans-Pritchard of Capital Economics said the outlook appeared challenging with “global and domestic growth unlikely to accelerate much further”. “The current pace of global growth is likely to be as good as it gets for the foreseeable future.” Though the yuan currency’s value has slid to a series of six-year lows against the greenback in recent weeks, making Chinese goods cheaper for trade partners, it has not been enough to lift exports into positive territory.
The yuan weakened further yesterday after the People’s Bank of China said the country’s foreign exchange reserves dropped nearly $46 billion in October, their second-largest decline this year as capital outflows eat into the world’s largest stockpile.
While yesterday’s trade figures disappointed, analysts with ANZ said they suggested that external demand had “not worsened significantly” despite earlier data on factory activity that pointed to a larger decline. Beijing is seeking to transition the economy away from being the world’s factory floor for cheap goods to supplying the country’s growing consumer needs. — AFP