China’s exporters, the last reliable pillar of the world’s second-largest economy, are starting to wither. Growth in Chinese exports has slowed significantly, which may be a result of anti-covid restrictions in China, but also fading world demand for goods.
Year-on-year increase in Chinese exports
Chinese export volumes increased just 7.4 percent year-on-year in August, while July’s growth was still 18 percent. Moreover, August’s numbers were well below analysts’ estimates. “It is very likely that China’s exports will slow, or even decline, even in the coming months, as signals increase that the world economy is slowing down or heading into recession,” Nie Wan, an analyst at Shanghai’s Hwabao Trust, said for Reuters.
Exports are crucial to rebuilding China’s economy
In doing so, exports are currently important to China more than ever. Indeed, China is still reeling from anti-covid measures that are significantly hampering domestic demand. Thus, the world’s most populous country relies on foreign demand to jump-start China’s economy.
But the slack in Chinese exports has been a matter for more years. According to the World Bank, China’s share of exports in its GDP decreased from 23.5 to 18.4 percent between 2014 and 2019. Thus, an eventual global recession will plunge China into even more economic problems, analysts estimate.
