HONG KONG – China’s strong export momentum has waned slightly in the first two months of this year as the global boom in demand for the country’s pandemic weakens, adding to pressure on policymakers to boost growth.
Exports in January and February rose 16.3% to $ 544.7 billion from $ 544.7 billion last year, according to the General Administration of Customs. Although it exceeded expectations for a 15% profit among economists polled by the Wall Street Journal, it is still slowing down from a 20.9% year-on-year increase in December.
Imports rose 15.5% year-on-year to $ 428.7 billion, up from 19.5% in December and in line with the 15.4% forecast by economists.
While China has bought lower volumes of energy, including coal, gas and crude oil, the prices of these goods have risen and could rise further as Russia’s invasion of Ukraine threatens to disrupt supplies.
Economists predict that China’s trade surplus, which soared to $ 676 billion last year and spurred the country’s rapid recovery from the pandemic by 2020, will provide less support to its overall economy this year.
“It is almost impossible for China to repeat such a strong export momentum this year,” said Shuang Ding, chief economist for China and North Asia at Standard Chartered Bank.
The country’s trade surplus is likely to shrink to about $ 480 billion this year, as export growth continues to decline and commodity prices such as grain and energy skyrocket, Ding said.
Factors that economists say could slow export growth include the gradual opening up of other countries, the reduction of their dependence on China’s supply chains and the expected forthcoming rise in interest rates by the US Federal Reserve. This would erode the spending power of consumers in the West, whose appetite for items such as furniture and consumer electronics has fueled strong Asian exports since the onset of the pandemic.
After expanding by 25% last year to reach a record $ 28.5 trillion, global trade growth is expected to slow in the first quarter of 2022, in part as more countries run out of pandemic stimulus packages, according to forecasts. United Nations Conference on Trade. and Development.
The war in Ukraine could exacerbate bottlenecks in the supply chain and strain the global recovery. It could particularly hit the economies of the European Union, which is China’s second largest trading partner. Standard Chartered recently reduced its forecast for the region’s economic growth to 3.1% in 2022, from 4%.
Any slowdown in the EU would reduce demand for global goods and negatively affect China’s export market prospects, said Larry Hu, chief economist at China at the Macquarie Group, adding that he predicted that annual export growth would slow 30 last year. % at a “high single digit” rate this year.
The weakening of China’s trade dynamics adds pressure on Beijing to increase incentives to stimulate domestic demand and meet this year’s growth target.
On Saturday, the government set a growth target of around 5.5% for this year, an ambitious target that paves the way for more aggressive fiscal and monetary support as the country continues to face headwinds in the domestic economy, including falling real estate and sluggish recovery in consumption.
“With the Ukraine crisis imposing downward risks on global demand, China should rely more on domestic demand in 2022,” Zhiwei Zhang, chief economist at Pinpoint Asset Management, wrote in a note Monday. “Now the pressure is on fiscal policy to succeed.”
—Grace Grace contributed to this article.
I write to you Stella Yifan Xie at email@example.com
Copyright © 2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
China’s export boom is slowing, raising pressure for stimulus
Source link China’s export boom is slowing, raising pressure for stimulus