China’s trade figures drop in August

China’s export growth has fallen in August and imports have also shrunk. This is due to rising inflation, high energy prices, and COVID-19 restrictions taking a toll on demand for goods and services in the global as well as domestic consumer markets of China.

While exports showed a growth of 7% over a year ago to US$ 314.9 billion, this is one-third of July’s 18% expansion. Simultaneously, imports fell by 0.2% to US$ 235.5 billion. The demand for Chinese exports decreased because of a slowdown in the Western markets and a rise in interest rates by the Federal Reserve and central banks in Europe and Asia to control inflation. 

The slowdown in China’s trade market has impacted its economy. The growth rate of the Chinese economy has fallen to 2.5% in the first half of 2022 which is less than half of the annual target of 5.5%. The coronavirus has led to a temporary shutdown and reopening of factories in the southern business center of Shenzhen. The energy generated from the hydropower plant was also disabled due to the dry summer in China’s southwest.