Explainer | China trade: 4 takeaways from July’s data as exports tumbled by most since start of Covid pandemic
- China’s exports fell by 14.5 per cent last month from a year earlier, dropping by the fastest pace since February 2020
- Imports fell by 12.4 per cent in July from a year earlier, and analysts say ‘domestic demand has softened recently’
1. Exports show broad-based decline
The July figure was below expectations for a fall of 4.8 per cent, according to Wind, a leading provider of financial information services in China.
Analysts at Capital Economics said that the fall was mostly due to base effects and lower prices, and that their estimate when accounting for seasonality and changes in export prices showed export volumes edged down by only 0.9 per cent, month on month.
They added that strong shipments of green technology, including Chinese-made electric vehicles, batteries and solar panels, were helping to offset declines in other areas.
“The recent declines mostly reflect lower prices rather than volumes, which are still well above their pre-pandemic trend,” said analysts at Capital Economics.
“We aren’t convinced that this strength will be sustained, given wider evidence that global-goods demand is dropping back as pandemic distortions unwind and monetary tightening weighs on consumer spending.”