By Finbarr Bermingham Dec 8 2019 / South China Morning Post
- Shipments down 1.1 per cent in month, but imports grow for first time since April
- Figures come just a week before US is set to impose fresh tariffs on imports of Chinese goods
China’s exports in November fell 1.1 per cent from a year earlier, marking a fourth successive monthly decline as the pain of the trade war with the United States continues to hit the world’s second-largest economy.The dip was below the expectations of a group of analysts polled by Bloomberg, who forecast 0.8 per cent growth, and worse than last month’s 0.9 per cent drop.
Imports, meanwhile, grew 0.3 per cent in November – their first monthly increase since April and only the second this year – beating the Bloomberg poll, which forecast a 1.4 per cent decline.
China’s trade balance for November stood at US$38.73 billion, down from US$42.91 billion in October and lower than analysts’ expectations of US$44.3 billion.
China’s trade growth, monthly In US dollar terms
Exports did not get the expected jolt from seasonal factors, such as the Christmas rush to buy consumer electronics goods.
November’s export decline comes despite a low comparison base. Shipments grew by just 3.9 per cent in November 2018, following gains of 14.3 per cent and 13.9 per cent in the previous two months.Li Kuiwen, director of the statistics and analysis department at China’s customs authority, said that “the international economic and trade growth has slowed this year, but the Chinese economy maintains stable”.
Detailed figures confirm the decline in Chinese trade with the US, while that with the European Union and the 10 members of the Asean expanded.
Chinese exports to the US fell 12.5 per cent year on year in US dollar terms in the first 11 months, while imports dropped 23.3 per cent.
But exports to the EU rose 4.5 per cent in the year through November, while imports rose 0.3 per cent. Exports to Association of Southeast Asian Nations countries rose 11.5 per cent during the period and imports gained 2.8 per cent.Released by the General Administration of Customs on Sunday, the trade figures followed surveys of manufacturers and service providers that suggested some improvement in China’s economy.
“In general, we don’t put a lot of stock in the purchasing managers’ indices. That’s especially true when the readings are hovering around the 50-point line where its hard to get a genuine signal from the index ” Trivium China
The export slump was telegraphed in both the Caixin/Markit Manufacturing Purchasing Managers’ Index – a survey of private firms – and the official PMI, which generally covers larger producers. They both suggested few people were expecting an uptick in overseas orders.Weaker signals have also been present in the economic data of China’s key trading partners, like South Korea, whose exports are often read as a leading indicator for China’s industry as it supplies key components such as microchips and semiconductors used in Chinese factories.
Meanwhile, on Thursday, US customs data for October confirmed the impact of the tariff war.
America’s goods trade deficit for the month fell 27.5 per cent year on year to US$31.3 billion – its biggest monthly drop for more than three years – amid plummeting purchases of Chinese products.
The slump in trade between the world’s two biggest economies is not unexpected. Heavy tariffs have caused buyers to look for alternative supplies, manufacturers to leave China and retailers in the United States to stuff their inventories in advance to avoid tariffs.And even if the ongoing negotiations are successful in avoiding the planned US tariffs on Chinese goods on December 15, or in rolling back other tariffs, many companies have already diversified their operations.
“We’re concerned that the longer this drags on the more difficult it will be to win back customers,” Ker Gibbs, chairman of the US Chamber of Commerce in Shanghai, said in an interview this week.
“Because the US is not working with like-minded partners, China has been moving to European and Japanese suppliers.”