Demand from markets outside the United States, such as the European Union and Africa, failed to compensate for the slump in sales to American consumers.
China’s exports fell in October, according to customs data, adding further strain to the world’s second-largest economy that is already grappling with sluggish domestic demand.
Overall sales abroad decreased by 1.1 percent last month from a year earlier, according to data released by the Chinese regime’s General Administration of Customs on Nov. 7. The figure fell short of a 3 percent growth forecast by economists in a Reuters poll and partially reversed the gain of 8.3 percent in September, representing the worst performance since February, when exports took a hit amid the Chinese New Year holiday.
While U.S. tariffs remained a drag on China’s trade, the latest slowdown was led by shipments to other markets, suggesting that the recent trade-weighted appreciation of the Chinese currency—the yuan or renminbi—may be impacting China’s export competitiveness, said Capital Economics’ Zichun Huang and Julian Evans-Pritchard.
“A partial rollback of US tariffs as part of the recent trade ‘deal’ may offer some support to exports. But any gains are likely to be limited, not least because easing US–China tensions appear to be adding to the tailwinds behind renminbi appreciation,” the economists wrote in a note on Nov. 7.
Starting from Nov. 10, the United States will halve fentanyl-related tariffs on China to 10 percent, as part of a one-year truce finalized last month, following the summit between U.S. President Donald Trump and Chinese leader Xi Jinping in South Korea.
With the tentative U.S.–China trade truce, Woei Chen Ho, an economist at United Overseas Bank in Singapore, expects China’s trade outlook to stabilize in the near term.
“However, ongoing supply-chain reconfiguration is set to continue while both countries will also seek to reduce their interdependence,” she said in a note, adding that the U.S.–China trade share may decline further over time.”
By Dorothy Li
