China's exports fall for 4th consecutive month showing pressure on trade

The customs data released on Thursday further showed that imports also slid 7.3% to $216.51 billion

In another blow to the already struggling economy, China reported an 8.8 per cent fall in its exports to $284.87 billion in August. This marks the fourth consecutive month that the exports of the world's second-largest economy have declined.

However, the decline is less severe than the 14.5 per cent drop reported in July, the worst since the onset of the Covid-19 pandemic.

Customs data released on Thursday also revealed that imports slid 7.3 per cent to $216.51 billion. The total trade surplus fell to $68.36 billion from $80.6 billion in July.

This ongoing economic weakness occurs at a time when Chinese policymakers are grappling to contain upheaval in the real estate sector. The sector is a major driver of the country's growth, contributing around 30 per cent to its gross domestic product (GDP).

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The Chinese economy struggled during the strict Covid-19 lockdown. Although the lockdown has been lifted, exports have failed to rebound due to high global inflation.

Demand for Chinese exports weakened after the Federal Reserve and central banks in Europe and Asia started raising interest rates last year to curb inflation that had reached multi-decade highs.

Chinese leaders have also implemented various policy measures to bolster the economy. The Chinese central bank has relaxed borrowing rules and reduced mortgage rates for first-time home buyers while offering some tax relief for small businesses.

Thus far, authorities have avoided large-scale stimulus spending or broader tax reductions.

This pessimism is also echoed in government forecasts. China's official economic growth target for this year is 5 per cent, the lowest in decades.

Exports to the US plummeted 17.4 per cent in August year-on-year to $45 billion. Imports of US goods dipped 4.9 per cent to nearly $12 billion.

China's imports from Russia, primarily oil and gas, rose 13.3 per cent year-on-year to $11.52 billion. Chinese purchases of Russian energy have surged, helping to compensate for revenue lost due to Western sanctions imposed to penalise the Kremlin for its invasion of Ukraine.

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Exports to the European Union fell 10.5 per cent compared to the same period last year, to $41.3 billion, while imports of European goods dropped 2.5 per cent to $24.56 billion.

(With agency inputs)