China trade: ‘alarming sign’ as October’s exports drag and regional rivals prosper, testing link with global economy

China’s exports fell for a sixth consecutive month in October, but imports beat market expectations and grew by 3 per cent last month

Analysts expect exports to decline over the coming months before bottoming around the middle of 2024 amid US-led tech containment and supply chain diversification

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China’s exports fell by 6.4 per cent from a year earlier in October. Photo: AP

Published: 11:18am, 7 Nov 2023Updated: 6:19pm, 7 Nov 2023

China’s exports fell more than expected in October as shipments to major trading partners remained weak, in contrast with upbeat growth recorded by its regional competitors, with analysts warning of “an alarming sign” for the world’s second-largest economy.

Exports declined for a sixth consecutive month in October, dropping by 6.4 per cent from a year earlier to US$274.8 billion, deeper than the fall of 6.2 per cent in September and much worse than the 3.8 per cent decrease expected by the market.

The decline underlined persistent external headwinds and clouded the overall economic recovery, although a surprisingly upbeat growth in imports brought initial signs that domestic demand may have bounced back.

“[The decline in exports] implies some structural factors – while there seems to be an upturn in the global electronics cycle, demand for other products like Christmas goods and shoes faltered,” said Xu Tianchen, an economist with The Economist Intelligence Unit.

“In addition, supply chain relocation could be already driving exports away from China.”

An alarming sign is that the shrinking exports point to a weakened link between China and the global economy

He Jun

Vietnam, which has emerged as one of the favoured investment alternatives to China, saw its exports grow for the second month in a row after rising by 5.9 per cent in October.