China’s exports unexpectedly shrink in October, badly missing expectations for growth

BEIJING — China’s exports fell by 0.3% in October from a year ago, missing Reuters expectations for a 4.3% increase. The decline in U.S.-dollar terms last month marked a sharp decline from a 5.7% year-on-year increase in September, and the first year-on-year drop since May 2020, according to Refinitiv Eikon data. Imports fell in October by 0.7% in U.S.-dollar terms, also missing expectations for slight growth of 0.1% and down from a 0.3% increase in September. China’s trade with countries and regions was only available in yuan terms on a year-to-date basis as of Monday morning. The U.S. remained China’s largest trading partner on a single-country basis, the data showed. For the year through October, Chinese exports to the U.S. slowed to an 8.4% pace, down from 10.1% recorded as of September. Imports from the U.S. grew by 1.7% as of October, faster than the prior month’s 1.3% pace. In addition to ongoing Covid controls, last month marked the Chinese Communist Party’s twice-a-decade congress at which President Xi Jinping consolidated his power. Last week, Barclays cut its forecast for China’s economic growth next year on expectations that falling demand from the U.S. and EU would prompt a drop of at least 2% in China’s exports. Prospects of an economic downturn in the EU and the U.S. have increased in the last few months. Many large American tech companies have recently announced layoffs and other cost-cutting measures. The U.S. Federal Reserve’s aggressive interest rate hikes have strengthened the greenback against other currencies. The yuan weakened by nearly 3% against the U.S. dollar in October, according to Refinitiv Eikon. In yuan terms, exports rose by 7% and imports by 6.8%, customs data released Monday showed.