(Bloomberg) -- China’s exports and imports shrank more than expected in September, as existing U.S. tariffs and the ongoing slowdown in global trade combined to undercut demand.
Exports decreased 0.7% in yuan terms from a year earlier, while imports declined 6.2%, the customs administration said Monday. Economists had forecast that exports would rise 1.5% while imports would shrink by 2.3%. Dollar values have not yet been released.
Key Insights
- The weak exports add pressure on the already deteriorating economy, which is expected to have grown at the slowest pace in the third quarter in almost thirty years. Gross domestic product expanded 6.1% in the three months to September, according to estimates ahead of data due Friday
- Nevertheless, some stabilization may be ahead, as U.S. and Chinese negotiators came to a “phase one” agreement on trade last week that pauses U.S. tariff increases in exchange for increased Chinese purchases of agricultural goods
- Before the deal announced over the weekend, Oxford Economics forecast that the worst is still to come for U.S.-China trade, which has already fallen 20%. “Bilateral trade has already been hit hard and is likely to decline considerably further, especially if tariffs are extended to more goods as threatened,” according to the report before the data from economist Adam Slater
- “More tariff hikes took effect in September and will likely weigh on export growth,” according to a report before the data from economists at China International Capital Corp., led by Eva Yi. “Flash PMIs of advanced economies remained sluggish in September, especially the euro area PMI, which fell further into contractionary territory and reached a seven year low.”
To contact the editor responsible for this story: Jeffrey Black at jblack25@bloomberg.net
©2019 Bloomberg L.P.
