MNI BRIEF: China's Exports Drop In Oct; First Fall Since 2020

China's exports fell 0.3% y/y in October for the first decline since May 2020 due to slowing global growth and Covid disruptions, according to China Customs data released on Monday.

The weak Chinese yuan did little to help exports, which decelerated from the 5.7% y/y growth pace recorded in September as external demand for China's exports was hurt by aggressive rate hikes by the world's leading central banks and as domestic production was disrupted by Covid measures. Economists had expected a 4.5% y/y increase, according to a Bloomberg survey.

Imports fell 0.7% y/y, slowing from a 0.3% y/y pace In September, due to lower commodity prices and weaker demand caused by pandemic controls. Different measures of China' manufacturing activity remained in the contraction zone in October, underscoring the tough conditions confronting manufacturers. (See MNI BRIEF: China's Oct Manufacturing PMI Falls Below 50)

Exports in the first ten months reached USD2.99 trillion, while imports amounted to USD2.27 trillion. The trade surplus over the Jan-Oct period was USD727.70 billion, with October contributing USD85.15 billion.

The United States ranked as the biggest buyer, with imports from China up 6.6% y/y in the Jan-Oct period. The European Union placed second, with a 14% y/y gain. Imports from the US increased 0.3% in the first ten months, and those from the EU fell 6.3%.