China's Export Decline Adds Domestic Pressure Amid Global Economic Headwinds

China continues to experience a significant drop in exports, marking the sixth consecutive month of decline and exerting additional pressure on the nation’s domestic economic policies.

China’s exports have seen a steep fall, pointing to persistent challenges within the Chinese economy despite recent growth, the Wall Street Journal reported. The latest figures released by China’s General Administration of Customs show a 6.4% decrease in exports in October year-over-year, totaling $275 billion. This decline is sharper than September’s 6.2% drop and exceeds economists’ predictions of a 3.5% fall.

The ongoing decrease in exports underscores a weakened global demand for Chinese products as the world grapples with an economic slowdown and higher interest rates. Other Asian nations, including South Korea and Taiwan, have also reported similar trends in their export figures.

The International Monetary Fund (IMF) anticipates a slowdown in global economic growth for the current and following year, influenced by central banks’ rate increases. While the U.S. might narrowly dodge a recession, a broader economic deceleration is expected.

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China’s reliance on domestic growth is becoming more critical as export weakness persists, and the country faces hurdles such as a contracting real-estate sector and cautious consumer spending. Although a rebound was seen in the third quarter due to stimulus measures like eased home purchase restrictions and lower interest rates, further stimulus is deemed necessary.

As reported by The Wall Street Journal, the rebound is not yet stable with recent business surveys indicating a drop in factory orders and slower activity in construction and services. Beijing has responded by intensifying stimulus efforts, focusing on infrastructure projects to stimulate the economy.

While imports have risen by 3%, ending a seven-month decline streak, economists caution that the Chinese government must maintain stimulus to sustain this improvement in demand. HSBC economist Erin Xin emphasized the need for continued support for growth.

Economic experts from Capital Economics predict a gradual increase in imports as the domestic economy strengthens, yet they foresee exports will likely keep falling until mid-next year.

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