China's October Exports Up 27.1%... Steady Growth Despite COVID-19 Resurgence

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Despite disruptions in industrial sites due to power shortages and sporadic resurgences of COVID-19, China recorded a robust export growth rate in October.

According to the General Administration of Customs of China on the 7th, China's exports in October amounted to $300.22 billion, a 27.1% increase compared to the same month last year.

Although the export growth rate in October was slightly lower than the previous month's 28.1%, it exceeded the market forecast of 24.5% compiled by major foreign media.

Due to a combination of issues such as coal supply problems for power generation and the rigid enforcement of carbon emission reduction policies by Chinese authorities, power transmission restrictions, mainly for industrial electricity, have continued since mid-September in at least 20 provincial-level administrative regions including Guangdong, Zhejiang, Jiangsu, and Liaoning provinces, causing significant disruptions in production for many manufacturing companies in China.

Additionally, the sporadic resurgence of COVID-19 occurring simultaneously in various regions of China has locally led to a contraction in economic activities such as production and consumption.

Despite these multiple adverse factors, China's exports have maintained relatively strong growth, which is analyzed to be due to robust global demand largely offsetting the impacts of power shortages and COVID-19 resurgences.

China's imports in October reached $215.68 billion, a 20.6% increase compared to the same month last year.

The import growth rate in October was higher than the previous month's 17.6%, but fell short of the market forecast of 25.0%.

As a result, China recorded a trade surplus of $84.54 billion in October.

Meanwhile, amid the United States' demand for faithful implementation of the Phase One trade agreement, which centers on expanding U.S. goods purchases by China, China's trade surplus with the U.S. in October was $40.75 billion, slightly down from $42 billion in the previous month.

Exports, considered one of China's three major economic growth engines, continue to show steady improvement, but the overall economic trend in China has been deteriorating recently.

The Evergrande crisis causing a sharp cooling of the real estate market, global supply chain bottlenecks, and power shortages are acting as combined adverse factors rapidly weakening the growth momentum of the Chinese economy.

Thanks to the base effect, China's economic growth rate (year-on-year) soared to 18.3% in the first quarter, then dropped to 7.9% in the second quarter, and further declined to 4.9% in the third quarter, which was below market expectations, making the economic slowdown trend more pronounced.

The manufacturing sector is particularly weak. The China Manufacturing Purchasing Managers' Index (PMI) recorded below 50 for two consecutive months starting in September, when raw material prices surged and power shortages began, indicating a contraction phase in the economy.

This content was produced with the assistance of AI translation services.