China’s exports slumped last month, dealing a blow to hopes that booming sales abroad would offset weak demand at home and drive growth in the world’s second-largest economy.
Exports shrank 7.5 percent in US dollar terms last month from a year earlier, while imports fell 1.9 percent, the Chinese General Administration of Customs said yesterday.
Both numbers came in well below economists’ forecasts. The trade surplus for the month was almost US$59 billion.
Photo: AFP
Bright spots in earlier data, especially from trade and industry, had offered encouragement that China’s goal this year of about 5 percent economic growth was within reach.
Manufacturing companies reported an expansion for the first time since September and new export orders also picked up after contracting for months. Banks including Goldman Sachs and Morgan Stanley raised their annual growth forecasts this week.
“Taking the positive surprise seen earlier this year, we still view that exports should be on a recovering trend, but modestly,” Societe Generale SA Greater China economist Michelle Lam (林雪潔) said. “The data may also lead to some less aggressive expectations for first-quarter GDP out next week.”
That number is due out on Tuesday, along with a raft of other data from retail sales to industrial output that would offer a clearer picture of the outlook.
Expectations that China would rely on demand in other nations to meet growth targets have helped stoke trade tensions with the US and Europe.
Those are not likely to fade even after last month’s slowdown because in some contentious areas China’s foreign sales are still advancing.
Exports of steel products rose 31 percent in the first three months of the year, the most since 2016. Back then, the EU, the US and Japan complained about Chinese steel overcapacity driving down global prices — concerns that have resurfaced in the past year.
In manufactured goods including vehicles and semiconductors — two areas where Western nations are trying to fend off Chinese competition — exports recorded double-digit percentage growth in US dollar terms in the first three months of the year.
Phone sales declined, but the actual number of phones shipped overseas rose 6.3 percent, illustrating how Chinese firms are slashing prices.
Generally, last month’s data need to be set in context of the previous two months, and quarterly data offer a more reliable guide, Pinpoint Asset Management (保銀私募基金管理) president Zhang Zhiwei (張智威) said.
On that basis exports rose 1.5 percent year-on-year, compared with a fourth-quarter contraction, which “shows a reasonable story about external demand,” Zhang said.
Other Asian nations have benefited from signs of improving international demand, with sales to the US and elsewhere driving a continued expansion in Taiwanese and South Korean exports last month.
Semiconductor shares in China surged yesterday after Reuters reported the US had ordered chipmaking giant Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to halt shipments of advanced chips to Chinese customers, which investors believe could accelerate Beijing’s self-reliance efforts. TSMC yesterday started to suspend shipments of certain sophisticated chips to some Chinese clients after receiving a letter from the US Department of Commerce imposing export restrictions on those products, Reuters reported on Sunday, citing an unnamed source. The US imposed export restrictions on TSMC’s 7-nanometer or more advanced designs, Reuters reported. Investors figured that would encourage authorities to support China’s industry and bought shares
FLEXIBLE: Taiwan can develop its own ground station equipment, and has highly competitive manufacturers and suppliers with diversified production, the MOEA said The Ministry of Economic Affairs (MOEA) yesterday disputed reports that suppliers to US-based Space Exploration Technologies Corp (SpaceX) had been asked to move production out of Taiwan. Reuters had reported on Tuesday last week that Elon Musk-owned SpaceX had asked their manufacturers to produce outside of Taiwan given geopolitical risks and that at least one Taiwanese supplier had been pushed to relocate production to Vietnam. SpaceX’s requests place a renewed focus on the contentious relationship Musk has had with Taiwan, especially after he said last year that Taiwan is an “integral part” of China, sparking sharp criticism from Taiwanese authorities. The ministry said
US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
CHANGING JAPAN: Nvidia-powered AI services over cellular networks ‘will result in an artificial intelligence grid that runs across Japan,’ Nvidia’s Jensen Huang said Softbank Group Corp would be the first to build a supercomputer with chips using Nvidia Corp’s new Blackwell design, a demonstration of the Japanese company’s ambitions to catch up on artificial intelligence (AI). The group’s telecom unit, Softbank Corp, plans to build Japan’s most powerful AI supercomputer to support local services, it said. That computer would be based on Nvidia’s DGX B200 product, which combines computer processors with so-called AI accelerator chips. A follow-up effort will feature Grace Blackwell, a more advanced version, the company said. The announcement indicates that Softbank Group, which until early 2019 owned 4.9 percent of Nvidia, has secured a
RSS