China's exports fall in three years

The People's Republic of China's exports declined at the highest rate since the COVID-19 pandemic began three years ago, as an ailing global economy puts increasing pressure on Chinese policymakers to implement new measures.

The pace of China's post-COVID recovery has slowed down in recent months, with analysts already reducing their forecasts for the rest of the year.

Outbound shipments from China fell 12.4% year on year in June, worse than predicted, according to statistics from China's Customs Bureau released on Thursday. Imports also contracted 6.8 percent, steeper than an expected 4.0 percent decline and the previous month's 4.5 percent fall.

Zichun Huang, China economist at Capital Economics, said, "The global downturn in goods demand will continue to weigh on exports. But the good news is that the worst of the decline in foreign demand is probably already behind us.”

Lv Daliang, a spokesperson for the General Administration of Customs, said that rising unilateralism, protectionism and geopolitics led to the poor performance of China’s exports.

Exports to the United States, China's main trading partner, have declined the most in the first half of this year. The diplomatic tensions between the US and China over chip technology impacted China’s exports. 

With exports contributing for approximately one-fifth of China’s economy, China's hopes for a speedy recovery have diminished after COVID-related lockdowns rocked the economy in 2022.

Xu Tianchen, senior economist at the Economist Intelligence Unit, told Reuters, “Soft exports and deflationary pressure will add to calls for stimulus, but I don't think the scale of support will be enormous.”

Chinese semiconductor imports decreased 13.6 percent in June, slower than the 15.3 percent drop observed in May, indicating Chinese manufacturers' limited appetite for components to re-export in finished items.

Demand for raw materials also showed signs of deterioration, with copper imports slowed down 16.4% year on year in June.