Data out Tuesday from Beijing shows Chinese exports are down for a second consecutive month, as the world’s second-biggest economy struggled to regain momentum after a currency devaluation and a stock market crash.
Exports from China to the rest of the world were down 5.5 percent in August. But there’s something else that worries economists.
“What’s interesting about it is not so much the export weakness, but the import weakness,” says Patrick Chovanec, chief strategist at Silvercrest Asset Management.
Imports to China in August were down 13.8 percent from a year ago. Chinese demand for global commodities like iron ore and aluminum are drying up.
“I think what that shows is just the depth of the slowdown taking place, particularly in heavy industry in China, and in construction and sectors that really were growth drivers,” says Chovanec.
The key word here is “were.”
As China transitions from an economy based on building things to one based on selling products to consumers, negative trade figures like this are likely inevitable. On the bright side for China, food imports to the country were up 25 percent, evidence that Chinese consumers are pulling their weight in these otherwise tough economic times. But they’re not yet contributing enough to China’s economy to deliver the rapid growth China enjoyed during the golden years of its big investment boom.
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