China’s weak exports in first half of 2019 are also bad news for its major trading partners

China’s exports in the first six months rose by just 0.1 per cent, dampening demand for imports to increase pressure on the worldwide supply chain

Biggest drop in first half exports was to the United States, down 8.1 per cent, despite the trade truce agreed by President Xi Jinping and US counterpart Donald Trump

Reading Time:5 minutes

China is the leading maker of personal computers and smartphones globally, but it continues to rely heavily on imported components from the US and the rest of the world. Photo: EPA

Published: 6:00am, 26 Jul 2019Updated: 6:08am, 26 Jul 2019

While the meagre 0.1 per cent rise in exports in the first six months of 2019 was bad news for China, it was even worse for many of its trading partners, with a flat performance by the world’s second large economy causing ripples through the tightly integrated supply chains created by globalisation.

A decline in Chinese exports automatically dampens its demand for imports of components used in finished exports and that, in turn, hurts every other economy that sells to China.

The biggest drop in first half exports was to the United States, with which China has been fighting a trade war for the past year. Exports to the US contracted by 8.1 per cent, a sharp reversal from the 13.5 per cent rise during the first half of 2018, according to the China’s General Administration of Customs.

But the decline in exports paled in comparison to the near 30 per cent drop in Chinese imports from the US, which range from raw materials to agriculture products, aircraft and semiconductors. The contraction was not only another indication of declining demand for American products, but more tellingly, a sign of weaker consumption worldwide.