Deadly Tianjin blasts weigh on China’s shipments as imports and exports fall amid weakening demand
Data published on Tuesday show shipments fell 6.1 per cent in yuan terms compared with year before and highlight sliding prices of inputs to China’s factories and their exports
Analysts say August’s deadly chemical blasts in the northern port city of Tianjin affected China’s shipments as the government reported exports and imports fell during the month.
The news will add to growth pressures facing the world’s second-largest economy.
Overseas shipments fell 6.1 per cent from a year earlier in yuan terms, the General Administration of Customs said on Tuesday.
The reading compared with a fall of 8.9 per cent in July.
Imports dropped 14.3 per cent, widening from an 8.6 per cent decrease, leaving a trade surplus of 368 billion yuan (US$57.8 billion).
The data highlights tepid demand around the world outside of the US and sliding prices for inputs to China’s factories and their shipments abroad.
“China is set to miss its export growth target for this year, and there will be no help from the external demand side for economic growth,” said Liu Xuezhi, a Shanghai-based macroeconomy analyst at Bank of Communications.
“China’s modest yuan devaluation has yet to show any effect on exporters.”
Given the weak export picture, the government will have to do more to stabilise growth, Liu said.
“The government is already trying hard to boost infrastructure spending, and that will be more important than exports for overall growth,” he said.
READ MORE: Families of dead contract firefighters row with Tianjin government over warehouse blast compensation
The explosions in Tianjin on August 12, which killed 161 people, including 96 firefighters, 11 policemen and 54 civilians, and left nearly 300 other people injured, had weighed on shipments, but the impact might be short-lived, analysts at Goldman Sachs, led by economist Song Yu, wrote in a report published before the data.
The exports figure compared with an estimated 6.6 per cent drop in dollar terms, according to the median forecast of economists surveyed by Bloomberg. Economists saw a 7.9 per cent decline in dollar terms for imports.
The offshore yuan swung from an earlier decline to trade 0.09 per cent stronger at 6.4762 against the greenback as of 10:52am in Hong Kong. The trade surplus widened from 263 billion yuan in July.
China’s exports may rise about 2 per cent this year compared with last year, while imports may slide about 10 per cent compared with the year before, said a State Information Centre and China Development Bank report published by Shanghai Securities News last week.
Successive interest rate cuts since November and stock-market volatility this year pointed toward “increasing misgivings over whether China actually retains the capacity to meet its projected economic growth targets”, the European Union Chamber of Commerce in China said in its 2015-16 position paper released on Tuesday.
