China’s exports and imports fell unexpectedly in October for the first time in more than two years, with rising risks of a recession causing overseas consumers to cut purchases and domestic problems such as the country's Covid-zero policy and a housing slump hitting demand at home.
Exports in dollar terms declined by 0.3 per cent last month from a year earlier, the customs authority said on Monday, well below the 4.5 per cent gain projected by economists.
Imports also fell 0.7 per cent, the first drop since August 2020. That left a trade surplus of $85.15 billion.
The weakness in exports adds to the domestic pressures on an economy already struggling due to the property market slump, persistent disruptions from Covid controls and weak consumer spending.
Resilient exports had been a major support to China’s recovery over the past two years due to strong international buying, but that looks to have reversed, with demand after the coronavirus-induced slowdown disappearing as the war in Europe boosted global inflation and uncertainty.
“The weak export growth likely reflects both poor external demand, as well as the supply disruptions due to Covid outbreaks,” said Zhang Zhiwei, president and chief economist of Pinpoint Asset Management.
“I expect export growth to remain weak in the next few months as the global economy slows.”
The data reinforces the message from South Korea’s trade figures last week, which also showed the first decline in shipments in two years as demand for electronics drops.
Almost all the nations in the euro area reported a further contraction in manufacturing in October while US business activity dropped for a fourth-straight month.
Exports to the US and Europe both fell, the data showed, as did shipments to Taiwan and Hong Kong. However demand from South-East Asia continued to be strong, with exports to Association of South-East Asian Nations rising by double digits for a sixth month.
The value of home appliance exports fell the most for any product group in the first 10 months of the year, down 11.5 per cent from a year earlier, according to a breakdown provided by customs. Exports of furniture, lighting equipment and medical devices also dropped during the period.
The decline in imports was widespread, with Chinese purchases from Australia, the US, Japan, South Korea and Taiwan all down.
Iron ore imports in the first 10 months of 2022 were down on last year as a drop in housing construction continues to destroy demand for steel and other construction materials.
“The surprise drop in China’s October exports — the first year-on-year fall since May 2020 — provides stark evidence that global demand is falling,” said Eric Zhu, a Bloomberg economist.
“With the property slump and Covid-zero restraints undercutting growth, policy stimulus will be critical to keeping the recovery going.”
The weak export growth likely reflects both poor external demand, as well as the supply disruptions due to Covid outbreaks. I expect export growth to remain weak in the next few months as the global economy slows.
Zhang Zhiwei,
president and chief economist, Pinpoint Asset Management
Authorities had previously warned the momentum was expected to weaken further.
“The risk of external demand growth slowing is increasing” in the fourth quarter, commerce ministry spokeswoman Shu Jueting said at a briefing last month.
The environment for trade is becoming increasingly complex for China and uncertainties are still increasing, she said, citing the slowdown in world economic and trade growth.
Aggressive policy tightening by major developed nations is raising fears of a global recession that would further hurt demand for China-made products.
The US Federal Reserve last week increased benchmark interest rates for the sixth time this year. European nations are expected to follow suit.
Covid outbreaks and stringent control measures at home are another major source of concern. Mobility restrictions aside, the nation’s unswerving commitment to the Covid Zero strategy is dashing hopes of any quick improvement in the economic situation, pushing Chinese households to save at a record pace and cut back on spending.
China’s authorities offered little hint of plans to rescue the ailing economy at the party congress last month, which triggered a historic rout on the stock market.
Investors should be able to have a clearer idea on whether China will ease up on its zero-tolerance approach to combatting Covid and whether it will step up support for the property market in coming weeks, with a string of key economic meetings planned.
The biog
Full name: Aisha Abdulqader Saeed
Age: 34
Emirate: Dubai
Favourite quote: "No one has ever become poor by giving"
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
UAE currency: the story behind the money in your pockets
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SPEC SHEET
Display: 6.8" edge quad-HD dynamic Amoled 2X, Infinity-O, 3088 x 1440, 500ppi, HDR10 , 120Hz
Processor: 4nm Snapdragon 8 Gen 1/Exynos 2200, 8-core
Memory: 8/12GB RAM
Storage: 128/256/512GB/1TB
Platform: Android 12
Main camera: quad 12MP ultra-wide f/2.2, 108MP wide f/1.8, 10MP telephoto f/4.9, 10MP telephoto 2.4; Space Zoom up to 100x, auto HDR, expert RAW
Video: 8K@24fps, 4K@60fps, full-HD@60fps, HD@30fps, super slo-mo@960fps
Front camera: 40MP f/2.2
Battery: 5000mAh, fast wireless charging 2.0 Wireless PowerShare
Connectivity: 5G, Wi-Fi, Bluetooth 5.2, NFC
I/O: USB-C
SIM: single nano, or nano and SIM, nano and nano, eSIM/nano and nano
Colours: burgundy, green, phantom black, phantom white, graphite, sky blue, red
Price: Dh4,699 for 128GB, Dh5,099 for 256GB, Dh5,499 for 512GB; 1TB unavailable in the UAE
The National in Davos
We are bringing you the inside story from the World Economic Forum's Annual Meeting in Davos, a gathering of hundreds of world leaders, top executives and billionaires.
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Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster with a decades-long career in TV. He has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others. Karam is also the founder of Takreem.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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UAE currency: the story behind the money in your pockets
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Mohammed bin Zayed Majlis
UAE currency: the story behind the money in your pockets
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
Company name: Play:Date
Launched: March 2017 on UAE Mother’s Day
Founder: Shamim Kassibawi
Based: Dubai with operations in the UAE and US
Sector: Tech
Size: 20 employees
Stage of funding: Seed
Investors: Three founders (two silent co-founders) and one venture capital fund
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
If you go
Flight connections to Ulaanbaatar are available through a variety of hubs, including Seoul and Beijing, with airlines including Mongolian Airlines and Korean Air. While some nationalities, such as Americans, don’t need a tourist visa for Mongolia, others, including UAE citizens, can obtain a visa on arrival, while others including UK citizens, need to obtain a visa in advance. Contact the Mongolian Embassy in the UAE for more information.
Nomadic Road offers expedition-style trips to Mongolia in January and August, and other destinations during most other months. Its nine-day August 2020 Mongolia trip will cost from $5,250 per person based on two sharing, including airport transfers, two nights’ hotel accommodation in Ulaanbaatar, vehicle rental, fuel, third party vehicle liability insurance, the services of a guide and support team, accommodation, food and entrance fees; nomadicroad.com
A fully guided three-day, two-night itinerary at Three Camel Lodge costs from $2,420 per person based on two sharing, including airport transfers, accommodation, meals and excursions including the Yol Valley and Flaming Cliffs. A return internal flight from Ulaanbaatar to Dalanzadgad costs $300 per person and the flight takes 90 minutes each way; threecamellodge.com
Global Fungi Facts
• Scientists estimate there could be as many as 3 million fungal species globally
• Only about 160,000 have been officially described leaving around 90% undiscovered
• Fungi account for roughly 90% of Earth's unknown biodiversity
• Forest fungi help tackle climate change, absorbing up to 36% of global fossil fuel emissions annually and storing around 5 billion tonnes of carbon in the planet's topsoil
UAE currency: the story behind the money in your pockets
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