China’s Exports Expected to Decline Further in August Amid Rising Trade Tensions: Reuters Poll

By Ethan Wang and Joe Cash

BEIJING – China’s exports are anticipated to have grown at the slowest rate in four months this August, as waning global demand and increasing trade barriers pose challenges for the world’s second-largest economy.

According to a median forecast from 34 economists, trade data expected on Tuesday is likely to reveal that outbound shipments increased by 6.5% year-on-year by value, a decline from the 7.0% growth seen in July.

Inbound shipments are projected to rise by 2% last month, significantly lower than the 7.2% growth recorded in July, which was bolstered by a low comparison base from the prior year and a surge in stockpiling chips ahead of anticipated U.S. tech restrictions.

Exports to China from South Korea, a major indicator of tech imports, also saw a slowdown in August after reaching a 21-month high in July.

The potentially disappointing data for August continues a trend of recent economic indicators that suggest China is finding it difficult to regain momentum following a challenging start to the second half of the year. Manufacturing activity contracted for the sixth consecutive month in August, accompanied by factory gate prices hitting their lowest in 14 months.

Furthermore, the expected slowdown in imports underscores weak domestic demand, affected by a prolonged slump in the housing market and rising job insecurities.

Analysts maintain that the economy could see some recovery for the remainder of the year, driven by an increase in fiscal spending and a degree of resilience in exports. However, significant risks linger, with escalating trade tensions and impending tariff increases threatening growth prospects.

Last month, Canada declared a 100% tariff on imports of Chinese electric vehicles, joining the U.S. and European Union in tightening trade measures against China. In Asia, India’s steel ministry is advocating for higher tariffs on steel imports from countries including China, while Malaysia has initiated an anti-dumping investigation into plastic products from China and Indonesia.

Analysts from Oxford Economics noted that "the peak of Chinese export momentum is likely over," cautioning that supportive price factors may diminish as tariffs come into effect.

According to the poll, China’s trade surplus for August is expected to be $82.05 billion, down slightly from $84.65 billion in July.