October’s Chinese foreign trade data caught experts by surprise. Both export and import volumes had unexpectedly fallen. In the case of imports, this is the first decline since May 2020, which economists read as a sure sign of an impending global recession.
China’s exports are at their worst since the pandemic began
The volume of Chinese exports in October fell by a slight 0.3 per cent year-on-year, but this is a very poor result compared to September’s growth of 5.7 per cent. Moreover, analysts had expected exports to grow by more than four percent in October. This is the worst data on Chinese exports since May 2020, when the country was in the midst of an anti-government lockdown.
Imports were also a negative surprise
The import ended even worse. Its volume decreased by 0.7 per cent year-on-year. From the point of view of China’s trade balance, this is good news, but from the point of view of global trade it is a negative surprise. The unexpected drop in Chinese imports means that Chinese demand for world goods is weakening. And if the trend is confirmed in the months ahead, the world will probably inevitably head into recession. The result of Chinese imports is the worst since August 2020.