You are here

China's exports fall for fourth straight month: Caixin index

Recent data shows the Chinese economy could suffer from the trade stand-off, with growth in China's service sector also moderating in July.


GROWTH of China's vast manufacturing sector slowed last month as the world's second-largest economy faces tighter conditions at home and an ongoing trade war with the US, which is starting to weigh on Chinese exporters.

The Purchasing Managers' index (PMI) declined to 50.8 in July from June's 51.0, it's slowest growth rate in 18 months, a survey published by Caixin and IHS Markit showed on Wednesday.

The survey is consistent with the official version of the index published a day earlier by the National Bureau of Statistics, which said that the PMI slid to 51.2 in July, from 51.5 in June.

The Caixin edition focuses more on smaller private firms, while the official index surveys larger state-owned companies.

Your feedback is important to us

Tell us what you think. Email us at

Both readings remained above the 50-point mark, which differentiates expansion from contraction.

"In general, the survey signalled a weakening manufacturing trend as a grim export market dragged on the sector's performance," said Zhengsheng Zhong, director of Macroeconomic Analysis at CEBM Group, in a note accompanying the survey.

"The rate at which new export business declined was the quickest recorded for just over two years amid reports of subdued market conditions."

The data published by Caixin showed that exports fell for the fourth month in a row, leading to slower output and new orders growth last month, while companies shed workers off faster than in June.

New export orders in both sets of PMIs came in under 50.

In the official PMI, the sub-index on imports, viewed as a proxy for domestic demand, fell into contraction in July and was the lowest since February.

China's economy is facing both headwinds at home and overseas. On the domestic front, the government has imposed tighter credit conditions in a bid to clean up the banks' balance sheets.

Meanwhile, the world's biggest exporter is engaged in a trade war with the US which accuses it of decades of unfair trade practices.

"The data clearly shows a slowdown in economic momentum," said Raymond Yeung, chief greater China economist for Australia and New Zealand Banking Group.

"It may justify the more proactive fiscal stance launched last week."

A first batch of US tariffs on Chinese goods came into affect on July 6. Another tranche on a further US$16 billion of China's exports could arrive as soon as Aug 1.

US President Donald Trump has even threatened to tax all of China's imports into the US, worth some US$500 billion.

So far exporters have said they have managed to offset negative impacts from the tariffs, thanks to the devaluation of the Chinese currency.

The yuan has dropped over 8 per cent in the past 2 months as investors are selling yuan assets ahead of a possible slowdown of the economy.

The central bank has made clear it would not hesitate to intervene to support the yuan and was not seeking a competitive devaluation.

To avert any severe downturn of the economy, Beijing has changed its stance to more accommodative policies and loosened pressure it was imposing on banks.

Last week, it unveiled a package of fiscal support including tax cuts and an acceleration of bond issuance for infrastructure investment.

Recent data shows the Chinese economy could suffer from the trade stand-off, with growth in China's service sector also moderating in July.

The official non-manufacturing PMI dipped to 54.0 in July from 55.0 the previous month.

A statement published after a politburo meeting this Tuesday said that China would "keep its economic growth within a reasonable range and achieve this year's target despite challenges".

China is targeting 6.5 per cent GDP growth this year.

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to