China’s exports accelerated their growth in August but imports slowed sharply, according to official figures released Tuesday, which once again show the fragility of the recovery in the world’s second-largest economy. Last month, sales of Chinese products and services destined for foreign countries rose 8.7% year-on-year, compared with +7% a month earlier, according to figures in dollars released by Chinese Customs. This figure is higher than the expectations of analysts surveyed by the Bloomberg agency (+6.6%).
Exports have historically been an important lever of growth for the Asian giant and their performance has a direct impact on employment for thousands of companies in the sector. They are up for the fifth consecutive month. But the economic context is uncertain, which undermines household consumption and fuels the risks for China to fall back into deflation, where it was at the end of 2023. On the import front, the increase in August is thus minimal, at +0.5% over one year, a figure significantly lower than that of July (+7.2%) and the expectations of analysts surveyed by Bloomberg (+2.5%).
“Deflationary pressure”
“The Chinese economy continues to show divergent trends, with weak domestic demand and strong export competitiveness, both of which reflect deflationary pressure in the country.”commented analyst Zhang Zhiwei of Pinpoint Asset Management in a note. “The question is how long exports can remain this strong, given the weakening U.S. economy and rising trade tensions.”he added.
China’s economic recovery has remained fragile and uneven since the lifting of strict health measures linked to the Covid pandemic in late 2022. The country remains particularly penalized by the real estate crisis, high youth unemployment and sluggish household consumption. Chinese authorities recently announced support measures for the private sector and say they are aiming for GDP growth of around 5% this year, a goal considered ambitious by many experts.
