BEIJING (Reuters) – China’s exports likely contracted at a slower pace in August, a Reuters poll showed on Tuesday, highlighting that manufacturers remain under pressure after outbound shipments recorded their worst performance since February 2020 last month.
Data for August are expected to show a 9.2% fall in exports from a year earlier, following a drop of 14.5% in July, according to the median forecast of 33 economists in the poll.
Barclays and Nomura were the most bearish, forecasting that overseas demand for Chinese goods worsened last month and are predicting a 15% drop in exports, while Standard Chartered forecast exports fell by just 4%.
Chinese factory activity shrank for a fifth straight month in August, weighed down by a lack of new export orders and imported parts, although factory owners indicated producer prices had improved for the first time in seven months, in a nod to improving domestic demand.
Policymakers have introduced a series of measures in recent months to shore up growth, with the central bank and top financial regulator last week easing some borrowing rules to aid homebuyers. But analysts warn these measures may struggle to move the needle amid a slowing labour market recovery and uncertain household income expectations.
Imports are expected to have shrunk by 9.0%, after dropping 12.4% in July, reflecting slightly improved domestic demand.
South Korean shipments to China, a leading indicator of China’s imports, dropped by just 20% last month, softening from a 25.1% fall in July.
The median estimate in the poll indicated that China’s trade surplus would shrink, with analysts predicting it will come in at $73.80 billion, compared with $80.6 billion in July.
China’s trade data will be released on Thursday. (This story has been corrected to show that South Korean August shipments fell 20%, not 27.5%, and that they improved, not worsened, vs July in paragraph 7)
(Reporting by Joe Cash; Polling credits: Milounee Purohit and Veronica Khongwir; Editing by Sharon Singleton)