Beijing, July 13, 2023: Chinese foreign trade slumped more than 12 per cent in June, the customs authority in Beijing announced on Thursday.
Exports were down by 12.4 per cent year-on-year to around $285 billion, they said.
At the same time, imports by the world’s second-largest economy fell by 6.8 per cent to around $215 billion.
Both figures were even worse than analysts had expected. Foreign trade had already dampened markedly in the previous months.
The main reason for the sharp decline in Chinese exports is the weak dynamics on the world markets.
High inflation, increased interest rates and high energy prices as a result of the war in Ukraine are also weighing on demand for Chinese products.
The decrease of imports is due to China’s lagging domestic market, after several years of strict coronavirus measures have taken their toll on the economy.
Trade with the world’s largest economy, the United States, fell particularly sharply, with China exporting 23.7 per cent less to the U.S. than in the previous year.
Exports to Germany, the largest economy in the European Union, meanwhile fell by 15 per cent.
Chinese imports from Germany rose by 0.7 per cent.
China is facing a “complex and difficult environment,” said Lyu Daliang, spokesperson for the customs authority.
However, the country’s economy is resilient and has great potential, he added.
German companies had also hoped for stronger results out of China this year.
The German Engineering Federation (VDMA), one of the largest industrial associations in Europe, reported a noticeable lull this week in response to the results.
Important customers are holding back on investments and regional governments lack the money for new large-scale projects, said the report.
Nevertheless, member companies continue to hope that their sales in China will grow by 6 per cent this year.
China is set to present growth figures for the second quarter on Monday.
In the first three months, economic output increased by 4.5 per cent.
Recently, many experts had lowered their expectations for the economic year.
China’s biggest economic problems include a crisis in the real estate market, high youth unemployment and general consumer reticence.