Sat, May 18, 2024

Imports to China Fell to the Lowest Point Since 2016

After The Ukraine Crisis, China Reaches Out To Its Asia

The state of the global economy was far from being ideal, even before the coronavirus pandemic. However, coronavirus created additional on the global economy. Moreover, this virus originated in China, which has the second-largest economy in the world after the U.S. 

Also, coronavirus reached most of the countries in the world. Consequently, governments are trying to tackle the problems associated with the coronavirus. However, it won’t be easy to get the economy back on track in a short period of time. Importantly, China is the world’s largest manufacturing powerhouse. As a result, it will be tough to overcome the coronavirus crisis without China. 

Let’s have a look at the local economy. China’s exports contracted in May as the coronavirus lockdowns continued to affect demand. Moreover, worse than expected fall in imports indicates the mounting pressure on manufacturers due to the issues related to the global economy. 

It is worth noting that trade plays very important for the global economy. Moreover, total trade accounts for about a third of the economy. This is not the end of the story as more than 180 million people across the country work in this sector.

The economy of China and coronavirus pandemic Local economy and main challenges

Moroever, to have a better understanding of how coronavirus pandemic continues to affect the world’s second-largest economy, it makes sense to have a look at China’s exports. In May, exports fell 3.3% compared to the same period of time in 2019. 

Interestingly, exports grew 3.5% in April based on the data provided by the authorities. Moreover, exports in May dropped 3.3% which was lower than expected. 

Last month, imports fell by 16.7% compared with May 2019. It was the sharpest decline since January 2016. Also, in April imports to China dropped 14.2%.

Furthermore, exports were expected to fall by 9.7% in May. However, thanks to the Association of Southeast Asian Nations (ASEAN) market exports dropped 3.3% instead of 9.7%. Let’s have a look at another factor. This factor is the exchange rate depreciation. 

Consequently, last month China posted a record trade surplus of $62.93 billion. Interestingly, it is the highest point since Reuters started tracking the series in 1981. Furthermore, China’s trade surplus with the U.S. widened to $27.89 billion in May. This comes at a time when U.S.-China tensions are again on the rise. However, at the moment it won’t be easy for President Donald Trump to scrap the Phase 1 trade deal. 

The country’s government has the potential to support the local economy. Otherwise, it will be more difficult to handle such issues in the future.

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