Chinese exports slow as global demand drops

Imports and Exports | | MIC Customs Solutions |

Chinese export volume growth declined in April compared with the previous month as world demand for manufactured goods returns to normal levels.

Exports of Chinese-made goods lost some of their strong recent performance in April as higher prices for raw materials and increased competition from other economies dented demand.

Reuters reports that last month, exports rose by 21.4 percent year-on-year. While still indicating a strong recovery from the slump seen in the early days of the Covid-19 pandemic, this was down from a 30.6 percent year-on-year increase in March.

Several factors have been noted as contributing to this. For instance, the news provider said production of goods in other exporting countries has increased in recent times as disruptions caused by the coronavirus ease.

China has also benefited from increased demand for items such as electronics, furniture and recreational goods for home use due to pandemic-related lockdowns. As these restrictions ease, trade volumes for these products are set to return to more normal levels.

Analysts at Capital Economics told Reuters that continued recovery in global demand is likely to move more towards the services sector than manufactured goods, which has already exceeded pre-Covid levels.

"China's share of global exports is likely to drop back as vaccines allow a return to more normal global consumption patterns," they added.

Meanwhile, increased prices for many raw materials are also weighing down many exporters, which is leading to lower profits and, as a result, deterring some firms from taking on new orders. Official factory reports revealed new export orders slipped in April from the previous month.

Nomura analysts stated: "Over the medium-term, we expect the downtrend of export growth to continue in [the] coming months and the pace of its slowdown to be more significant in the second half of this year."