China’s exports and imports unexpectedly shrank in October as COVID-control measures hit its troubled economy, and a global slowdown hurt demand.
According to Reuters, official data showed on Monday that the country’s exports in October contracted 0.3% from a year ago, a sharp decline from a 5.7% increase in September and much below expectations of a 4.3% increase.
A weakened yuan currency and a year-end shopping season could not help China’s exports, reflecting the weakening global demand.
Experts expect more bad news to come shortly.
Zichun Huang, an economist at Capital Economics, told Reuters, “Looking forward, we think exports will fall further over the coming quarters. … We think that aggressive financial tightening and the drag on real incomes from high inflation will push the global economy into a recession next year.”
China’s imports also fell 0.7% in October, down from a 0.3% increase in September and below analysts’ expectation of a 0.1% increase.
It’s the first simultaneous fall since May 2020.
Experts point out that sluggish domestic demand caused by the latest COVID restrictions and lockdowns in October probably hurt importers.
The ongoing property crisis is another critical reason for the decline in imports.
Last week, the official purchasing managers’ index (PMI) data showed that China’s manufacturing activity unexpectedly shrank in October.
Experts consider Beijing’s “zero-COVID” policy a significant hindrance to its economic growth, significantly disrupting business operations and hitting multiple sectors.
Last week, Chinese health officials gave no signal about easing COVID restrictions after several days of speculation that the regime was considering ending the controversial policy.