- China’s exports had a big fall in July, the largest in over three years.
- This happened because people around the world are buying less, which is making it harder for China’s economy to stay strong.
- The amount of money China earned from selling things to other countries went down by 14.5% in July compared to last year.
- This is the biggest drop since February 2020 when the COVID-19 pandemic first started and hurt production and China trade.
- The information comes from China’s customs data that was released on Tuesday.
- The value of goods shipped overseas from China fell 12.4% in June compared with a year earlier, to $285 billion.
- This alarming development has raised concerns about the possibility of an impending recession.
- In July, China’s crude oil imports fell by 18.8% compared to the previous month, reaching the lowest level since January.
- This happened because major oil exporting countries sent less oil, and China’s own oil storage increased.
- China’s exports to the United States fell by 23.1% compared to the previous year, and exports to the European Union went down by 20.6%, as shown by CNBC’s analysis of customs data.
- Exports to the Association of Southeast Asian Nations decreased by 21.4%, according to the data.
- This decline in China trade in July adds to the recent drop in China’s exports and imports.
- When looking at the entire year so far, China’s exports for the first seven months have fallen by 5% from a year ago.
- Imports have gone down by 7.6% during the same time.
- In the first seven months of the year, certain high-value export categories, such as cars, refined oil, and bags, have shown promising performance.
- On the import side, categories like paper pulp, coal products, and edible vegetable oil have experienced substantial growth compared to the same period last year, from January to July.
The Ripple Effect on China’s Trade
- The slowdown in China trade is a major concern for the global economy.
- China is the world’s largest exporter, and its slowdown is likely to have a ripple effect on other countries.
- It remains to be seen how long the slowdown will last and how it will impact the global economy.
| Year | Imports | Exports | Growth Rate (YoY) |
| 2020 | $2.5 trillion | $2.9 trillion | -8.0% |
| 2021 | $2.8 trillion | $3.5 trillion | 22.2% |
| 2022 | $2.4 trillion | $3.7 trillion | 9.7% |
| 2023 | $2.2 trillion | $3.6 trillion | -8.7% |
Affecting Reasons for China Import Export
Here are some additional details about each of the factors that are contributing to the slowdown in China’s imports and exports:
US-China trade war:
- The US has imposed tariffs on billions of dollars worth of Chinese goods, and China has retaliated with tariffs of its own.
- This has made it more expensive for businesses in to China trade between the two countries, and it has led to a decline in both imports and exports.
A slowdown in global growth:
- The global economy is growing more slowly than it has in the past few years.
- This is due to a number of factors, including the trade war between the US and China, the COVID-19 pandemic, and the war in Ukraine.
- As global growth slows, businesses are importing less from China.
Weakening of the Chinese yuan:
- The Chinese yuan has lost about 10% of its value against the US dollar in the past year.
- This makes it more expensive for Chinese exporters to sell their goods overseas.
The COVID-19 pandemic:
- The COVID-19 pandemic has disrupted supply chains and led to a decline in demand for Chinese goods.
- This is because factories have been forced to close and businesses have been forced to cut back on spending.
The Russia-Ukraine War:
- The Russia-Ukraine war has raised energy and food prices, which has led to a slowdown in global economic growth.
Conclusion:
China’s exports had a significant decrease in July, the biggest in over three years, due to weaker global demand, putting pressure on Beijing to boost its economy.
In July, China’s exports dropped by 14.5% compared to the previous year, which was worse than what analysts had expected.
Imports also fell by 12.4%, highlighting the difficulties caused by reduced global demand and slowing economies in China’s trade.
References:
Frequently Asked Questions
China’s General Administration of Customs reported that in June, the worth of products sent out of China to other countries dropped by 12.4% from the previous year, totaling $285 billion. This comes after a 7.5% decrease in May.
Several factors, including sluggish global growth, trade tensions such as the US trade war, domestic structural shifts, demographic changes, debt concerns, environmental priorities, geopolitical uncertainties, and government policies, collectively contribute to China’s economic slowdown.
Data from Tuesday’s customs report revealed that imports in July were down 12.4% compared to the previous year, which was more significant than the expected 5% decrease as per a Reuters poll. In contrast, exports showed a more pronounced decline of 14.5%, exceeding the predicted 12.5% decrease and the previous month’s 12.4% drop.
