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Friday, January 27, 2023

China’s trade shrinks amid virus pressure and interest rate hikes | business news

BEIJING (AP) — China’s imports and exports contracted in November under pressure from weakening global demand and anti-virus controls at home.

Exports sank 9% from a year earlier to $296.1 billion, worsening from October’s 0.9% drop, customs data showed on Wednesday. Imports fell 10.9% to $226.2 billion, below the previous month’s 0.7% decline, in a sign of a deepening economic slowdown in China.

The country’s global trade surplus narrowed by 2.5% from a year earlier to $69.9 billion.

Trade had been forecast to weaken as global demand cooled after the Federal Reserve and central banks in Europe and Asia raised interest rates to curb rising inflation.

Chinese consumer demand has been hit by a “zero COVID” strategy that locks down large sections of cities to contain virus outbreaks. That has disrupted business and confined millions of people to their homes for weeks.

Consumer spending contracted in October and factory activity weakened as virus checks after a surge in infections weighed on the economy.

Retail sales sank 0.5% from a year earlier, down from September’s 2.5% expansion, as millions of people were confined to their homes, government data showed on Tuesday. Factory output growth slowed to 5% from 6.3% the previous month.

The performance was even weaker than expected by forecasters, who said activity would cool due to Chinese anti-virus controls and interest rate hikes by the US Federal Reserve and other central banks. weighed on global activity.

“November is shaping up to be even worse,” Zichun Huang of Capital Economics said in a report.

Chinese economic growth rebounded to 3.9% a year earlier in the three months ending in September from 2.2% in the first half, but economists say activity was already cooling. They have cut annual growth forecasts to 3%, which would be among the weakest in decades.

Exports to the United States fell 25.4% from a year earlier to $40.8 billion, while imports of US goods plunged 7.3% to $16.5 billion. The politically sensitive surplus with the United States narrowed by 34.1% to $24.3 billion.

Russia’s imports, mainly oil and gas, rose 28% from a year earlier to $10.5 billion. Exports to Russia rose 18.5% to $7.7 billion.

Washington, Europe and Japan are cutting purchases of Russian oil and gas to punish the government of President Vladimir Putin for its attack on Ukraine, but their sanctions do not stop China, India or other countries from buying their exports.

Beijing is buying more to take advantage of Russian discounts. That rankles Washington and its allies by recharging the Kremlin’s cash flow. President Joe Biden has warned Xi not to help Putin evade sanctions.

Xi said in a letter to a business conference this month that China, one of the biggest buyers of Russian oil and gas, is ready to “forge a closer partnership” with Moscow on energy, according to the official Xinhua news agency. He did not give details.

Copyright 2022 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.

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