China's exports and imports sink in September as global demand falters

HONG KONG (AP) — China’s exports and imports both fell in September from a year earlier, though they contracted at a slower pace than the month before even as global demand remained muted.

Customs data released Friday showed exports for September slid 6.2% to $299.13 billion in the fifth straight month of decline. Imports also slid 6.2%, to $221.43 billion.

China posted a trade surplus of $77.71 billion, up from $68.36 billion in August.

Lu Daliang, spokesperson of the General Administration of Customs, said in a press conference Friday in Beijing that the unstable momentum of the global economy’s recovery from the pandemic was the biggest challenge facing China’s exports.

China's economy has declined at a slower pace after leaders enacted a slew of policy support measures in recent months. However, property sector remains a drag on the economy, with sales slumping and developers struggling to repay massive amounts of debt.

The central bank has eased borrowing rules and and cut mortgage rates for first-time home buyers while providing some tax relief measures for small businesses.

Demand for Chinese exports weakened after the Federal Reserve and central banks in Europe and Asia began raising interest rates last year to cool inflation that was at multi-decade highs.

Exports to the U.S. tumbled 16.4% from a year earlier while those to the European Union declined nearly 11%.

“Measures of foreign orders point to a more substantial decline in foreign demand than what has been reflected in the customs data so far,” Zichun Huang, a China economist with Capital Economics said in a note. “And the lagged impact of higher interest rates is likely to dampen consumer spending in major export markets over the next few quarters.”

However, he said imports are likely to pick up in the coming months as increased spending on construction rises, driving higher demand for building materials and other commodities.

China’s imports from Russia, mostly oil and gas, increased 12.7% in September from a year earlier to $11.53 billion.

Chinese purchases of Russian energy have swelled, helping to offset revenue lost to Western sanctions imposed to punish the Kremlin for its invasion of Ukraine.