As global demand weakened, China’s exports fell 12.4% in June from the same period last year

China’s exports fell 12.4% in June compared to the same month last year as demand declined as a result of central banks raising interest rates to fight inflation even as Chinese authorities battled to prevent a post-COVID rebound from stalling.

According to customs figures issued on Thursday, imports decreased 6.8% to USD 214.7 billion. Exports were USD 285.3 billion, slightly more than the previous month. The trade surplus increased from USD 65.8 billion in May to USD 70.2 billion.

The second-largest economy in the world is under more downward pressure due to trade difficulties. After the Federal Reserve and central banks in Europe and Asia boosted interest rates to tame inflation from near multi-decade highs by stifling industry and consumer activity, global consumer demand deteriorated.

China’s overall commerce, which includes imports and exports, decreased by close to 5% from January to June of last year. As the price of commodities like oil dropped and domestic demand weakened, exports decreased by 3.2% and imports by 6.7%.

The amount of products exported to the United States fell by 23.7% from a year earlier to USD 42.7 billion, a six-month low, while the amount of goods imported from the United States fell by 4.1% to USD 14 billion. The politically unstable trade surplus between China and the United States decreased by 31.6% to USD 28.7 billion.

Tensions with Washington and limitations on access to US processor chips and other technologies as a result of a dispute with Beijing over security and Chinese industrial policy have also hampered trade. The majority of smartphones and other devices are assembled in Chinese facilities.

“We think exports will decline further for now before bottoming out toward the end of the year,” Capital Economics’ Zichun Huang said in a statement. “The global downturn in goods demand is continuing to weigh on exports.” The good news is that we are probably already beyond the worst of the decrease in international demand.

The official economic growth goal for this year was set by the governing Communist Party at “around 5%,” up from the second-weakest expansion of 3% since the 1970s last year. Following surprisingly positive trade data in March, several analysts increased their growth projections to more or less 6%.

The administration proposed measures to aid struggling exporters in April, including expanding the availability of trade credit and promoting international e-commerce.

By enhancing logistics and lowering costs for exporters in 17 cities, including Beijing and Shanghai, a five-month initiative that was begun in late April also aims to boost commerce.