BEIJING: China’s export growth slowed to a six-month low in August, as a brief boost from a tariff truce with the United States faded, but demand elsewhere provided officials some relief as they try to underpin an economy facing low domestic demand and external risks.
Policymakers are counting on manufacturers to diversify into other markets in the wake of US President Donald Trump’s erratic trade policy, enabling them to delay rolling out additional fiscal support in the fourth quarter.
Outbound shipments from China rose 4.4 per cent year-on-year in August, customs data showed on Monday (Sep 8), missing a forecast 5 per cent increase in a Reuters poll and marking the slowest growth in six months. They compared with July’s better-than-expected 7.2 per cent increase.
Imports grew 1.3 per cent, following 4.1 per cent growth a month earlier. Economists had predicted a 3.0 per cent rise.
“I would say the number is still decent, and the resilience of exports has certainly lasted longer than we had expected,” said Xu Tianchen, senior economist at the Economist Intelligence Unit.
Trump’s tariff threats pose a stern test to China’s export-oriented economy, but policymakers are loathe to implement difficult but much-needed economic reforms under external pressure, analysts say.
The world’s two largest economies agreed on Aug 11 to extend their tariff truce for another 90 days, locking in place US levies of 30 per cent on Chinese imports and 10 per cent Chinese duties on US goods, but they appear to be struggling to chart a path beyond the current pause.
Once Trump’s tariffs top 35 per cent, they become prohibitively high for Chinese exporters, economists warn.
