China's export growth in August fell to a six-month low of 4.4% from a year earlier, below a Reuters poll forecast of 5% and well below a 7.2% surge in July.
Imports grew by just 1.3%, down sharply from 4.1% in July and well below expectations of around 3.0%.
China is now looking to expand its manufacturing sector to Asian, African and Latin American markets in an effort to reduce its reliance on weak domestic demand and external risks.
While shipments to the United States (US) fell 33.12%, shipments to Southeast Asian countries rose 22.5% in August.
China and the US have extended a 90-day tariff truce since August 11, freezing tariffs of 30% on Chinese goods and 10% on US goods, but efforts to chart a long-term solution remain unclear.
The weakness in exports to the US was offset by a surge in other markets but failed to match the size of US demand, which used to absorb more than $400 billion of Chinese products annually.
China’s trade surplus widened to $102.3 billion in August from $98.24 billion in July, but was still below June’s $114.8 billion.
In conclusion, the sharp decline in China’s export growth in August reflects the growing challenges posed by trade tensions and fragmented global demand. Long-term strengthening now depends on success in diversifying markets and stimulating domestic demand.
