SUMMARY
- August sees better-than-expected decline in imports and exports.
- U.S.-China trade shows a glimmer of recovery despite continued setbacks.
- Auto exports shine, with a staggering 69% growth in eight months.
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While China faced another dip in both imports and exports last month, the decline wasn't as sharp as experts anticipated. Specifically, August saw exports drop by 8.8% from the previous year, which might sound bad, but it actually beats the 9.2% drop that was predicted. Similarly, imports took a 7.3% hit, but still outperformed the gloomy 9% forecast.
However, a trend is emerging: China's imports have been sliding each month of 2023 compared to 2022. The demand for Chinese goods on a global scale has been shrinking since April. In a closer look at the trade between China and the U.S. (their top trade partner on a solo country basis), exports to the U.S. in dollar terms dipped by 9.5% in August, but it's an upgrade from the over 20% plummet seen in the prior two months.
On the other hand, imports from the U.S. fell by 7.9%, a figure that seems more palatable when compared to the double-digit tumble of July. Speaking of partners, the Association of Southeast Asian Nations holds the title of China's prime trade ally regionally. But even here, exports and imports declined by 13.3% and 6.1% respectively in August.
Economists, like Hao Zhou from Guotai Junan International, argue that although there's a slight uptick, the overall trade landscape still faces challenges. He believes China's trade future will pivot on a myriad of issues, from the property sector to the unstable yuan and oil price fluctuations. After all, China stands as the globe's most voracious consumer of crude oil, with its import volume shooting up by 14.7% in the first eight months of 2023.
Lastly, a ray of hope in these trying times: China's auto exports. Even though the growth pace decelerated in August, auto exports rocketed by a whopping 69% from January to August when compared to 2022. Not too shabby, considering it slightly tapered from a 74.1% surge in the first seven months.
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