China‘s August Exports Growth Slows, U.S.-Bound Shipments See Sharp Decline
BEIJING – China’s export growth decelerated in august, climbing 4.4% year-on-year in U.S. dollar terms, marking the lowest growth rate since February and falling short of economists’ expectations of a 5.0% increase, according to customs data released Monday. A significant driver of this slowdown was a 33% plunge in shipments to the United States, despite the U.S. remaining China’s largest single-country trading partner.China exported $283 billion worth of goods to the U.S. between January and August of this year. While ample, this represents a marked shift as China increasingly diversifies its trade relationships, focusing on markets in Southeast Asia, the European Union, Africa, and latin America – a trend accelerated by trade tensions with the U.S.Total exports to the EU reached $541 billion over the same period.
The August export growth also reflects a statistical effect stemming from a high base last year,when China’s exports experienced their fastest pace in nearly one-and-a-half years.
Imports into China rose 1.3% last month, also missing Reuters estimates of 3% growth, though marking a third consecutive month of increase. This growth remains muted,impacted by ongoing challenges in the real estate sector and rising job insecurity.The trade figures come amid a prolonged trade dispute between beijing and Washington. The two countries agreed on August 11th to extend their tariff truce by 90 days, maintaining U.S. tariffs of around 55% on Chinese imports and 30% Chinese duties on U.S. goods. However, bilateral negotiations have struggled to yield substantial progress, including a recent visit by top Chinese trade negotiator Li Chenggang to Washington.Adding to the complexity, the U.S. is increasing scrutiny of “transshipments” – a tactic used by Chinese exporters to route goods through third countries to avoid U.S. tariffs. In July, the U.S. announced a 40% tariff on any shipments determined to be transshipped, a move analysts warn could further weigh on Chinese exports.
Despite the slowdown in overall trade, a private survey, the RatingDog purchasing managers’ index, indicated resilient external demand, showing China’s manufacturing activity sharply beat expectations in August, boosted by a recovery in new export orders.
Looking ahead, China is set to release its consumer price index and producer price index later this week.Goldman Sachs anticipates the producer price index will remain “deeply negative,” falling 2.9% year-on-year, while headline CPI inflation is forecast to be “moderately negative,” declining 0.2% from a year ago. Goldman sachs attributes potential positive movement in the PPI to Beijing’s policies aimed at curbing excessive price-cutting and recent increases in raw material costs.
