Chinese exports rose in November for the first time in seven months, officials said on Thursday, as the country faces a troubled recovery from the Covid-19 pandemic.
But the reading compares with a low base from last year, when authorities were still hammering out a zero-Covid policy that hit manufacturing and business activity, while a surprise drop in imports highlighted weak consumer activity at home.
Overseas shipments rose 0.5 percent year-on-year to $291 billion, the General Administration of Customs (GAC) said, marking their first increase since April.
The figure was much better than analysts’ forecasts and followed a 6.4% drop in October.
“The improvement in exports is broadly in line with market expectations,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
While exports are now seeing “sequential growth”, he added that “it is not clear whether exports can contribute as a pillar of growth next year”.
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“European and US economies are cooling. China still needs to depend on domestic demand as the main driver of growth in 2024,” he told AFP in a note.
Chinese exports — long a key driver of growth — have largely fallen since last October except for a short-lived recovery in March and April.
The world’s second-largest economy grew a modest 4.9 percent in the third quarter, slightly short of Beijing’s target of five percent, which is one of the lowest in years.
Officials have struggled to maintain a recovery from the impact of the pandemic, even after draconian containment measures are lifted at the end of 2022.
Exports have been hit by weak global demand, while the housing crisis and weak consumption have caused headaches at home.
Consumer prices contracted 0.2% in October, signaling a return to deflation after a modest recovery since the summer.
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Meanwhile, some of the nation’s biggest real estate developers are hundreds of billions of dollars in debt and teetering on the brink of bankruptcy.
On Tuesday, Moody’s downgraded the outlook for China’s credit rating to “negative” from “stable”, citing the country’s mounting debt.
The rating agency said the decision reflected growing signs that Beijing would support local governments and state-owned enterprises under financial pressure.
This, he added, “posed major downside risks to China’s fiscal, economic and institutional strength.”
Ting Lu, chief China economist at Japanese bank Nomura, said on Thursday that asset woes remained “the biggest problem affecting China’s economy”.
“Despite the slew of stimulus measures announced recently, we believe it is still too early to bottom out,” he said in a note.
Weakness in consumer activity was highlighted by a 0.6% decline in imports to $224 billion in November, marking a return to contraction.
They had seen a surprise jump in October, offsetting a sharp drop in the forecast and marking the first month of annual growth since late last year.
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It was hoped that the rise could be a signal that consumer sentiment is recovering.
Source: AFP