Sluggish demand in 2022 to affect China’s export outlook: Report


China’s declining exports to the European Union (EU) in October and the third straight month of lower exports to the US cast a shadow over China’s export outlook, according to a recent report. The US and the EU are China’s largest export destinations, accounting for 16.5 per cent and 15.8 per cent of its overall export value in the first 10 months of 2022 (10M22), and coincident recessions are predicted in both the US and eurozone next year.

China’s exports of apparel and footwear dropped by 17 per cent and grew by a slower 3 per cent, respectively, from a high base. The nation’s exports of many upstream and midstream products including textiles to the EU have plunged amid the latter’s muted downstream production this winter, according to a report titled ‘China Corporates Snapshot–November 2022: China’s Exports Dip on Deteriorating Demand from EU’ by credit rating agency Fitch Ratings.

China’s declining exports to the EU in October and the third straight month of lower exports to the US cast a shadow over China’s export outlook. The US and the EU are China’s largest export destinations, accounting for 16.5 per cent and 15.8 per cent of its overall export value in 10M22, and coincident recessions are predicted in both the US and eurozone.

China’s exports to the EU dropped by 9.0 per cent year-on-year (YoY) in October from a high base and as industrial activities slow amid an energy shortage. This is in sharp contrast to the growth of 16.9 per cent in the first nine months of 2022 (9M22).

China’s exports fell by 0.3 per cent YoY in October 2022, the first YoY decline since May 2020, due to weakening demand from key trading partners, pandemic-induced production and logistics disruptions, and diminishing effects from price inflation, added the report. Exports to Germany, France, and Italy plunged by 11 per cent, 28 per cent, and 22 per cent, respectively, in October, while that to the Netherlands grew by a slower pace of 4 per cent, from high bases last year.

Exports to the US fell for the third straight month in October by 12.6 per cent, while exports to the Association of Southeast Asian Nations (ASEAN) grew by a robust 20.3 per cent, driven by trade disintermediation, the Regional Comprehensive Economic Partnership that took effect on January 1, 2022, and a low base a year ago.

Fibre2Fashion News Desk (NB)




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