China’s October exports continued to cool as global demand weakened: Health & Fitness Journal poll by Health & Fitness Journal

©Health & Fitness Journal. FILE PHOTO: An aerial view shows containers and cargo ships at the port of Qingdao in Shandong province, China, May 9, 2022. Image captured by a drone. China Daily via REUTERS

BEIJING (Health & Fitness Journal) – China’s export growth is likely to have cooled further in October as global demand weakened further, while imports remained sluggish amid slowing domestic growth, a Health & Fitness Journal survey showed on Friday.

According to the median forecast by 20 economists in the survey, exports are likely to have risen 4.3% yoy last month, slowing from a pace of 5.7% in September. That would be the slowest growth since April, when COVID lockdowns in Shanghai rocked the world’s second-largest economy.

“The tepid outlook for global supply chains does not bode well for China’s exports,” said Raymond Yeung, chief China economist at ANZ.

“As the US and European economies slow, demand for electronic components could remain sluggish into next year,” he added.

Trade data will be released on Monday.

China’s booming exports beat expectations in the first half of 2022 – and were one of the few bright spots for its struggling economy – but global interest rate hikes, rising inflation and disruptions from the Russia-Ukraine war have combined to dampen global demand.

An official survey found that factory activity unexpectedly fell in October, weighed down by fewer export orders and tough COVID-19 restrictions. Orders are falling despite a further weakening of the yuan currency, which should make Chinese goods more competitive heading into the key year-end shopping season.[CNY/]

High-frequency data points to a further slowdown in the fourth quarter, with container throughput in major ports falling 9% in the first 10 days of October, economists at Barclays (LON:) said in a note.

“In addition to slowing global demand amid a likely global recession, we are noticing that export orders that would normally be sent to China are being diverted to other emerging markets.”

Combined with a high base of comparison from last year, Barclays forecasts that China’s exports could fall by 2-5% in 2023.

Imports, meanwhile, are likely to remain extremely weak as widespread COVID-19 containment measures weigh on domestic consumption.

The survey showed imports rose just 0.1% yoy, compared with a 0.3% increase in September.

Goldman Sachs (NYSE:) analysts said lower oil prices would also hurt overall import growth.

South Korea’s exports, a leading indicator of China’s imports, saw their worst decline in 26 months in October. Exports to China, its largest market, fell 15.7%.

The weak trade forecasts implied China’s trade surplus would widen to $95.95 billion from $84.74 billion in September.

China’s COVID-19 cases hit their highest level in two and a half months on Thursday, with the effects of the curbs continuing to reverberate. Cities with high- and medium-risk counties accounted for about 52% of national GDP as of Friday, according to Goldman Sachs.

(Survey compiled by Anant Chandak; Reporting by Ellen Zhang and Ryan Woo; Editing by Kim Coghill)