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



Disclaimer: Clime Asset Management Pty Limited | AFSL 221146 | ABN 72 098 420 770.  The information provided in this post is intended for general use only. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information contained therein. Please consider the relevant disclosure document/s before investing in one of our products. Investment in securities and other financial products involves risk. An investment in a financial product may have the potential for capital growth and income but may also carry the risk that the total return on the investment may be less than the amount contributed directly by the investor. Investors risk losing some or all of their capital invested. Past performance of financial products is not a reliable indicator of future performance or returns.