China Exports Fall for Fourth Month as Once-Reliable Growth Engine Sputters

China Exports Fall for Fourth Month as Once-Reliable Growth Engine Sputters
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A deep downturn in the property sector has also pushed imports to their 11th month of declines in the past year.

HONG KONG—China’s exports to the rest of the world dropped for a fourth straight month in August amid softening global demand, offering little relief from a deepening economic malaise.

China has struggled to sustain a wave of overseas demand for Chinese-made goods that carried it through much of the three years of the Covid-19 pandemic, particularly as Western consumers tilted their spending back toward services and away from goods. Higher borrowing rates in the U.S. and other developed countries also hit consumer appetites.

China’s outbound shipments dropped 8.8% in August from a year earlier, contracting for a fourth consecutive month, China’s General Administration of Customs said Thursday. The reading was better than the 10% decline expected by economists polled by The Wall Street Journal. They represented an improvement from the 14.5% year-over-year drop in exports in July, which marked the worst such result since February 2020.

Imports into China, including intermediate components, commodities and consumer products, fell 7.3% in August from a year earlier, a pace slower than July’s 12.4% drop as well as the 9.7% decline anticipated by economists.

Even with the better-than-expected trade data, economists generally agree that exports’ ability to provide support for China’s sputtering recovery remains a distant prospect, particularly given that global trade is expected to contract this year.

Apart from the general slowdown in trade, China is facing a raft of other economic headwinds. After a brief spurt of spending on traveling and dining out upon reopening early this year, consumers tightened their purse strings, dragging consumer prices into deflationary territory in July. China is set to report August inflation data on Saturday.

Factory activity, meantime, reported a fifth straight month of contractionin August, while a yearslong downturn in the housing market has deepened in recent months. Private investment remains depressed, while the youth jobless rate climbed to a series of record highs in the summer before Beijing decided to discontinue releasing the data.

“There’s still a steep hill to climb to get the all-clear on stabilization for China,” said Frederic Neumann, chief Asia economist at HSBC.

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