China's exports fell in October for the first time in over two years. As reported by the Beijing customs authorities, exports from the second largest economy fell by 0.3 percent in US dollars compared to October last year.
Despite known problems, the decline was rather unexpected. Although analysts had expected a slowdown, they still expected at least slight growth in exports. Imports also declined, falling by 0.7 percent compared to October of the previous year. Chinese exports last contracted in May 2020.
Observers cited weak global demand as the reason for the decline. But the still strict corona restrictions in China also led to ongoing problems in the supply chains.
"The decline in foreign trade figures is difficult for the weakening economy in China to cope with. Since the beginning of the pandemic, exports have been a central pillar for the Chinese economy, which is now shaking," commented Jens Hildebrandt, Executive Board Member of the German Chamber of Commerce (AHK) in Beijing, the numbers.
"Imports are also declining, which points to the gloomy mood among Chinese consumers," Hildebrandt continued. The newly formed management team in China must come up with something quickly to escape the pull of the global recession.
Apple is struggling with delivery bottlenecks
Apple provided an example on Monday of how the corona measures are having a negative impact on the country's exports. The US group admitted that it was struggling with significant delivery bottlenecks for the new iPhone 14 Pro during the important Christmas season. Production at the main plant in China is being affected by Covid restrictions. The plant of the Taiwanese contract manufacturer Foxconn in Zhengzhou is affected by the regional government's corona lockdowns.
German companies have also been complaining for a long time that the lockdowns, which are often announced at very short notice, make their production and planning significantly more difficult.
Exports to Germany are falling
As in the previous month, China's trade with Germany again fell noticeably by 5.7 percent in October. Chinese exports to Germany fell by 10.9 percent. China's imports from Germany, on the other hand, rose slightly by 0.5 percent. While Chinese exports to the European Union fell 7.7 percent, China's imports from Europe fell 5.1 percent.
China's foreign trade with the USA decreased particularly significantly by 10.4 percent. Chinese exports to the US fell 12.6 percent, while imports from the US fell 1.5 percent.
Lockdowns slow down the economy
The prospects for the Chinese economy continue to deteriorate due to the weak export figures. The zero-Covid strategy with lockdowns in particular is slowing down the Chinese economy, which is also suffering from a serious real estate crisis, high levels of debt and weak domestic demand.
The government is expected to fall well short of the original growth target of around 5.5 percent for this year. The World Bank calculates with only 2.8 percent. That would be only the second time in four decades that China's growth has been so low, following the first year of the 2020 pandemic. In the third quarter, the Chinese economy grew by 3.9 percent.
