The 2nd largest economy of the world, China reported that the economy’s trade suffered the biggest drop in the last month, since the 2008 financial crisis. The report by China has hinted that global demand is weakening while the domestic economy itself is slowing down.
The country’s exports dropped by 0.5 percent from a year back, settling at a value of $149.9 billion, whereas imports dropped by 15 percent, to settle at a value of $122.7 billion. The figures were revealed by customs data. Moreover, the country’s global trade surplus increased by triple as compared with a year before, as it settled at a value of $27.3 billion.
Trade in the first month of the year was expected to fall by analysts as well because of the Lunar New Year, which sent the country on holidays. Orders were rushed out by exporters in December however due to the New Year, they were sent on a holiday for two weeks or for some even more, in January.
While exports declined, imports did too and the decline in imports was more than the decline in exports, which is a new hint that the 2nd largest economy of the world is slowing down. China is a major importer of oil, iron ore, amid other things (industrial components, commodities) and a downturn in the Chinese economy will be bad for its exporters including countries such as Brazil, South Africa and Australia.
Alistair Thornton, HIS Global Insight’s analyst was also quick to point this out as it was said by Alistair in a report that a dramatic drop in import demand is a reflection of an extremely low local demand, as economic activity slows down and investment drops.
The report from China is the newest to add into worries that the global demand and economy is still not improving.
