Chinese exports contract in October, sorely missing growth expectations

A cargo ship carrying containers is seen near the port of Yantian in Shenzhen, following the outbreak of the novel coronavirus disease (COVID-19), Guangdong province, China May 17, 2020.

Martin Pollard | Reuters

BEIJING – Chinese exports fell 0.3% in October from a year ago, missing Reuters expectations for a 4.3% increase.

The decline in U.S. dollars last month marked a steep decline from a 5.7% year-on-year increase in September and the first year-on-year decline since May 2020, according to data from Refinitiv Eikon.

Imports fell 0.7% in US dollars in October, also missing expectations of a slight 0.1% growth and down from a 0.3% increase in September.

China’s trade with countries and regions was only available in yuan on a yearly basis as of Monday morning. The United States remained China’s largest trading partner on a single-country basis, the data showed.

For the year to October, Chinese exports to the United States slowed to an 8.4% pace from September’s 10.1%. Imports from the United States rose 1.7% in October, faster than the previous month’s 1.3% pace.

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In addition to ongoing Covid checks, the past month marked the Chinese Communist Party’s two-decade congress in which President Xi Jinping consolidated his power.

Barclays last week lowered its forecast for China’s economic growth next year, expecting lower demand from the US and EU to lead to a decline of at least 2% of Chinese exports.

Prospects of an economic slowdown in the EU and the US have increased in recent months. Many major US tech companies recently announced layoffs and other cost-cutting measures.

Aggressive interest rate hikes by the US Federal Reserve have strengthened the greenback against other currencies. The yuan weakened nearly 3% against the US dollar in October, according to Refinitiv Eikon.

In yuan terms, exports rose 7 percent and imports 6.8 percent, according to customs data released on Monday.

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