Chinese exports fall 12.4% in June due to weak global demand

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HONG KONG (AP) — Chinese exports fell 12.4% in June from a year earlier, on weak demand after central banks raised interest rates to combat inflation, and as Chinese authorities tried to prevent the post-COVID recovery from faltering.

Customs data released Thursday showed a 6.8% decline in imports to $214.7 billion. Exports rose slightly compared to the previous month, reaching 285.3 billion dollars. The trade surplus was 70.2 billion dollars.

Weak demand adds to downward pressure on the world‘s second largest economy. Global consumer demand has fallen after the Federal Reserve and central banks in Europe and Asia raised interest rates to curb inflation, which had broken decades-long records, reining in business activity and consumption.

Between January and June, China’s total trade, including imports and exports, fell about 5% from a year earlier. Exports fell by 3.2% and imports fell by 6.7%, due to a drop in the prices of raw materials such as crude oil and the decline in Chinese domestic demand.

Exports to the United States fell 23.7% from a year earlier, to $42.7 billion, while imports of US goods fell 4.1% to $14 billion. China’s trade surplus with the United States, a politically sensitive issue, narrowed 30.6% to $28.7 billion.

Trade has also been slowed by tensions with Washington and restrictions on access to US processors and other technology, amid a dispute with Beijing over security and Chinese industrial policy. Chinese factories assemble most of the world‘s smartphones and other electronics.

The country’s ruling Communist Party has set an economic growth target of “around 5%” for this year, after 3% the previous year, which was the second weakest since the 1970s. Some economists raised their growth forecasts closer to 6% following unusually strong trade numbers in March.

The government announced support measures for struggling exporters in April, including making more financing available and encouraging cross-border e-commerce.

A five-month campaign launched in April also aimed to increase trade by improving logistics and cutting costs for exporters in 17 cities, including Shanghai and Beijing.