China’s exports for the January-February period fell, pointing to continued weakness in foreign demand and backing government concerns that a global slowdown will hamper the country’s recovery from pandemic-era damage.
Imports dropped, too, government data showed on Tuesday, also reflecting weak foreign demand, since the country brings in parts and materials from abroad for many of its exports.
“Given the high inflation in the US and Europe, demand from there should keep weakening, which also dampens the 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 before, after a 9.9% annual fall seen in December.
The result was, however, better than the average expectation in a Reuters poll for a fall of 9.4%.
Imports were 10.2% weaker, a worse result than in December, when they were 7.5% lower than a year earlier. They greatly missed the poll estimate for a 5.5% drop.
“The data came as a result of worsening global demand for goods, given the fact that the export decline happened not only in China, but also among other major Asian exporters, such as South Korea and Vietnam,” said Xu Tianchen, economist and the Economist Intelligence Unit, referring to other recent data.
A 26.5% plunge in China’s imports of semiconductors indicated a shrunken market for the consumer electronics exports that such parts are used to make.
China has set a target for gross domestic product (GDP)growth this year of around 5%, after severe pandemic controls last year knocked the economy to one of its slowest rates in decades.
Last year’s GDP was up only 3% on 2021.
Commerce Minister Wang Wentao has cautioned that downward pressure on China’s imports and exports would increase significantly this year, because of the risk of a global recession and weakening external demand.
“In dollar terms, imports declined more than exports, suggesting weak demand in both domestic and foreign markets,” said Dan Wang, chief economist at Hang Seng Bank China.
China’s imports of coal and soybeans jumped from a year before, the customs bureau data showed, while arrivals of crude oil were down 1.3%. Imports of natural gas fell by 9.4%.
Exports to the US decreased by 21.8%, while imports from the US fell by 5%. Exports to the European Union were down 12.2%, with imports dropping 5.5%.
The customs agency publishes combined January and February trade data to smooth out distortions caused by the shifting timing of the Lunar New Year, which this year fell in January.
Economists expect imports to recover gradually as consumer confidence returns following the removal of Covid-19 restrictions in December, but they say the slowdown abroad could also hold down the volume of goods coming into China.