BEIJING: China’s exports unexpectedly fell in October following months of front-loading to beat United States President Donald Trump’s tariffs, giving voice to investor concerns over the broader economic impact of a rift in US-China trade ties.
Outbound shipments from the world’s second-largest economy shrank 1.1 per cent last month, the worst performance since February, customs data showed on Friday (Nov 7), reversing from an 8.3 per cent rise in September, and missing a forecast for 3 per cent growth in a Reuters poll.
The figure was affected by a high base from last October when exports grew at their fastest pace in over two years, as factories began rushing inventory to major markets in anticipation of Trump’s triumphant return to the White House.
Chinese exports to the US tumbled 25.17 per cent year-on-year, the data showed, while those to the European Union and Southeast Asian economies – big trading partners with whom policymakers have sought to bolster ties amid tariff tensions with Washington – grew by just 0.9 per cent and 8.9 per cent, respectively.
Economists estimate the loss of the US market has cut export growth by around 2 percentage points, or roughly 0.3 per cent of gross domestic product.
Woei Chen Ho, economist at UOB Singapore, said the drop in exports was due to a combination of geopolitical uncertainty and technical factors, such as China shutting down for an extra holiday this year compared to last.
“With the trade truce, we should be expecting the outlook to stabilise in the near-term,” she said.
“Longer-term, there’s still going to be the ongoing supply-chain move out of China and also both countries will try to reduce their interdependence, and we’re going to see the US share of China trade, especially exports, drop.”
Early indicators showed China’s economy had lost some momentum last month. The official purchasing managers’ index fell to a six-month low and suggested that the wider world had taken in all the Chinese goods it could for now, with factory owners reporting a marked drop in new export orders.
