Quick Bite | China trade data looking weak

China’s exports and imports fell more sharply than expected in July, adding to a prolonged trade slump that is fuelling concerns over growth prospects for the world’s second-largest economy.

Exports declined by 14.5% year on year in dollar terms, the steepest fall since the outset of the pandemic in February 2020. Imports fell 12.4%, significantly more than forecast.

Weakness in international trade is one of the main sources of pressure for Beijing, which is also grappling with a struggling property sector and insipid domestic demand since lockdown measures were lifted in December.

China’s exports helped prop up its economy during three years of closure to the world, but have struggled in 2023 as high global inflation and rising interest rates dampened international demand for its goods.

Weak China trade could be one of the factors putting pressure on the AUD. The Australian dollar decline in recent weeks appears to be linked to disappointing China data – not surprising considering our trade linkages.

Source: FT

 

 

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