BEIJING, March 7 (Reuters) – China’s January-February exports fell, underscoring continued weak foreign demand and confirming government concerns that a global slowdown will hamper the country’s recovery from the damage by the pandemic.
Imports also fell, according to government data released on Tuesday, also reflecting weak foreign demand, as the country imports parts and materials from abroad for many of its exports.
“Given high inflation in the US and Europe, demand is expected to continue to weaken, which is also dampening processing demand in China,” said Iris Pang, chief economist for Greater China at ING. .
Exports in January and February were 6.8% lower than a year earlier, following a 9.9% annual decline in December. The result was, however, better than the average expectation in a Reuters poll for a 9.4% decline.
Imports were 10.2% lower, a worse result than in December, when they were 7.5% lower than a year earlier. They largely missed the poll’s estimate for a 5.5% decline.
“The data is the result of worsening global demand for goods, as the decline in exports occurred not only in China, but also among other major Asian exporters, such as South Korea and Vietnam,” said Xu Tianchen, economist and Economist Intelligence Unit, referring to other recent data.
See 2 more stories
A 26.5% drop in Chinese semiconductor imports indicated a shrinking market for exports of the consumer electronics these parts are used to manufacture.
China has set a target for gross domestic product (GDP) growth this year of around 5%, after tough pandemic controls last year caused the economy to plummet to one of its lowest rates. slow for decades. Last year’s GDP grew only 3% from 2021.
Commerce Minister Wang Wentao warned on Thursday that downward pressure on China’s imports and exports will increase significantly this year, due to the risk of a global recession and weakening external demand.
“In dollar terms, imports fell more than exports, suggesting weak demand in domestic and overseas markets,” said Dan Wang, chief economist at Hang Seng Bank China.
The data pushed stocks in Hong Kong and mainland China lower, erasing earlier gains. Hong Kong’s Hang Seng index was down 0.33% late in the afternoon, while China’s blue-chip CSI300 index was down 1.46%.
Chinese imports of coal and soybeans jumped from a year earlier, according to data from the customs office, while arrivals of crude oil fell 1.3%. Natural gas imports fell 9.4%.
Exports to the United States fell 21.8%, while imports from the United States fell 5%. Exports to the European Union fell by 12.2%, while imports fell by 5.5%.
The customs agency releases combined January and February trade data to alleviate distortions caused by the Lunar New Year shift, which this year fell on January.
Economists expect imports to gradually recover as consumer confidence returns after COVID-19 restrictions were removed in December, but they say the slowdown overseas could also dampen the volume of goods entering China.
In February, manufacturing activity grew at its fastest pace in more than a decade, National Bureau of Statistics data showed last week, giving economists reason for optimism.
Factory activity readings from other Asian economies for February were more pessimistic, however, reinforcing views that conditions abroad were more gloomy.
Reporting by Joe Cash and Ellen Zhang; Editing by Bradley Perrett
Our standards: The Thomson Reuters Trust Principles.