On Tuesday, insights from released data reveal that China’s exports suffered a decline in July. This downturn marks the sharpest drop since February 2020, raising concerns over the sluggish economy.
Comparing to the same month a year ago, exports fell by a significant 14.5% to $281.76 billion USD, whereas June had seen a 12.4% decrease. Leading financial information provider Wind reports that July’s figures were lower than the expected 4.8% drop.
Meanwhile, imports in July, in comparison to the same period last year, plunged by 12.4% to $201.16 billion USD, which is even less than June’s 6.8% decrease, and falls short of Wind’s projection of an 11.4% decline.
China’s total trade surplus was $80.6 billion USD in July, up from $70.62 billion USD in June.
The Association of Southeast Asian Nations, China’s biggest trading partner that had extended substantial support to its export sector earlier this year, saw a 21.43% drop in July compared to a year ago in terms of shipment, marking a consecutive second monthly decrease.
Meanwhile, the European Union experienced a 20.62% decrease in exports. On a year-on-year basis, after a 23.12% decrease in July, the United States has witnessed a consistent 12-month drop in shipment.
“Since the onset of the pandemic, Chinese exports have seen the most significant decline in July. However, this recent drop is more indicative of lower prices than reduced volume, which still remains well above its pre-pandemic trend,” noted analysts from Capital Economics.
“We remain cautious about the sustainability of this strength, as ample evidence suggests a weakening global demand due to receding pandemic distortions and the impact of monetary tightening on consumer spending.”
“There has also been a recent softening in domestic demand; imports have been at their lowest since the beginning of the year. But consistent policy support in the coming months should help alleviate this weakness.”