December 19, 2016: China’s exports have been falling significantly this year due to a dip in global trade volumes. Exports in the first 10 months of the year fell 7.7 percent from the same period a year earlier while imports dropped 7.5 percent. In the aftermath of Brexit and the US presidential elections, exports have taken a serious hit. Exports, which were primarily seen as the driver of China’s growth, are not expected to contribute to the nation’s growth in the next few quarters.
China’s exports and imports fell in October as well, erasing hopes and forecasts that the sector would redeem itself. October exports fell 7.3 percent from a year earlier while imports shrank 1.4 percent, official data showed.
However, November’s data showed a slight growth in exports. Export growth came in at 0.01% year over year, the second highest rating of 2016. Imports on the other hand rose to a 26-month high of 6.7%. The improvement in imports is mainly due to acceleration in ordinary imports.
Analysts at HSBC believe that November’s data indicates a demand for major commodities as well as improving economic activity and prices. Further, they expect domestic demand to further stabilise in the coming quarters as rising prices will not only improve profitability but also restore the private sector’s confidence.
In the coming year, China’s exports will be largely dependent on the trade policies of the US government once Donald Trump takes office in January.