China’s export growth weakened in August and imports shrank as high energy prices, inflation and anti-virus restrictions weighed on global and Chinese consumer demand.
BEIJING — China’s trade weakened in August as high energy prices, inflation and anti-virus measures weighed on global and Chinese consumer demand, while imports of Russian oil and gas surged.
Exports rose 7% over a year ago to $314.9 billion, decelerating from July’s 18% expansion, customs data showed Wednesday. Imports contracted by 0.2% to $235.5 billion, compared with the previous month’s already weak 2.3% growth.
Demand for Chinese exports has softened as Western economies cool and the Federal Reserve and central banks in Europe and Asia raise interest rates to contain surging inflation. At home, repeated closures of Chinese cities to fight virus outbreaks has weighed on consumers’ willingness to spend.
“The slowdown in China’s export sector is adding to headwinds for the Chinese economy,” said Rajiv Biswas of S&P Global Market Intelligence in a report. Lack of import growth highlights “continued weakness of Chinese domestic demand.”
Growth in the world’s second-largest economy fell to 2.5% in the first half of 2022, less than half the ruling Communist Party’s 5.5% annual target, after Shanghai and other industrial centers were shut down to fight virus outbreaks.
Factories have reopened, but restrictions more recently in areas including the southern business center of Shenzhen weighed on activity. So has a dry summer that left reservoirs in the southwest unable to generate hydropower and disrupted river shipping.
The International Monetary Fund and private sector forecasters have trimmed their already low growth forecasts.
China’s global trade surplus widened by 36.1% over a year earlier to $79.4 billion.
Exports to the United States sank 3.8% from a year ago to $49.8 billion while imports of American goods declined 7.3% to $13 billion. The politically sensitive trade surplus with the United States that helped to spark a tariff war narrowed by 2.4% to $36.7 billion.
President Joe Biden has left in place tariff hikes imposed by his predecessor, Donald Trump, in a fight over Beijing’s technology development tactics. Beijing retaliated by raising its own import duties and told Chinese companies to stop buying American exports.
Envoys from the two sides talk by phone but have yet to announce a date to resume negotiations.
Imports from Russia, mostly oil and gas, surged 59.3% to $11.2 billion as China appeared to take advantage of discounts offered by the Kremlin to attract buyers in the face of Western sanctions over its war on Ukraine.
China’s purchases of Russian energy irritate Washington and its allies but don’t violate sanctions on Moscow. Last year, China bought 20% of Russian crude exports, according to the International Energy Agency.
Beijing declared ahead of the February invasion that it had a “no limits” friendship with Moscow. It criticizes the sanctions but has avoided helping President Vladimir Putin for fear of losing access to Western markets and the global banking system.
Exports to Russia rose 26.5% to $8 billion.
Exports to the 27-nation European Union tumbled 18.4% to $51.3 billion, reflecting weak European demand.
Imports of European goods plunged 33.1% to $26 billion. China’s trade surplus with Europe widened by 5.4% to $25.3 billion.