Falling Chinese Economy... Both Domestic Demand and Exports Decline

Exports, which have supported the Chinese economy, are rapidly contracting. Concerns about an economic recession, triggered by recent domestic demand sluggishness, are growing stronger.

According to the General Administration of Customs of China on the 13th, China's exports in June decreased by 12.4% year-on-year in dollar terms. This figure falls short of both the previous month's figure (-7.5%) and the forecast (0.5%). Monthly exports had been declining from October last year (-0.3%) through February this year (-6.8%), rebounded in March (14.8%) and April (8.5%), but plunged again in May (-7.5%).

[Image source=AP Yonhap News]

Imports also declined due to weak demand. China's imports in June were down 6.8%, missing both the previous month's figure (-4.5%) and the forecast (-6.1%). Monthly imports have shown a negative trend for eight consecutive months since October last year (-0.7%).

The trade surplus was recorded at $70.6 billion (approximately 90.015 trillion KRW). Although this is an improvement from the previous month's $65.8 billion, it fell short of the forecasted $93.9 billion. L? Daliang, spokesperson for the General Administration of Customs, explained regarding last month's trade performance that "the weak global economic recovery, slowdown in trade and investment, unilateralism, protectionism, and increased geopolitical risks have caused poor export results."

Some market analysts predict that China's economic growth rate for this year may be around 3%. The second quarter GDP growth rate, scheduled to be announced on the 17th, is expected to be around 7%, which is due to the base effect from last year's Shanghai lockdown and other impacts.

In particular, as the pace of domestic demand recovery slows in China, deflation is imminent. The consumer price index (CPI) inflation rate for June was 0.0% year-on-year, falling short of both the previous month's figure (0.2%) and the forecast (0.2%). China's CPI inflation rate has remained in the 0% range for four consecutive months following March (0.7%), April (0.1%), and May (0.2%).

The producer price index (PPI) inflation rate recorded a year-on-year decline of 5.4%, the lowest level since January 2016. It fell short of both the previous month's figure (-4.6%) and the forecast (-5.0%), marking six consecutive months of negative growth.

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