From: lessgovt@gmail.com   
      
   China’s Drop in Exports Signals Deepening Slowdown in Global Trade   
   By Jason Douglas, July 13, 2023, WSJ   
   SINGAPORE—Exports are crumbling in China and across Asia, showing the   
   deepening toll that rising interest rates are taking on global trade and   
   economic growth.   
      
   Trade has been slowing for months, but the pullback has further to run,   
   economists say, as central banks keep up their campaigns to beat back   
   inflation and the U.S. and Europe slide toward recession.   
      
   Chinese exports fell at their steepest annual pace in June since the early   
   days of the pandemic in February 2020. China isn’t the only Asian export   
   powerhouse reporting sinking overseas sales. Exports from Taiwan fell 23% in   
   June compared with a year    
   earlier, while Vietnamese exports were down 11%. Exports from South Korea were   
   down 6%, according to official figures compiled by data provider CEIC.   
      
   Global trade has been softening for months as Western consumers quit spending   
   so much on electronics, home improvements and other consumer goods after   
   splurging during the pandemic. Instead, they have chosen to spend more of   
   their income on eating out,    
   traveling and other services.   
      
   Now, trade is facing new pressure from cooling growth in the U.S. and Europe   
   as surging borrowing costs squeeze consumer and business spending. Many   
   economists expect the U.S. to tip into recession this year.   
      
   Longer term, the outlook for global trade has taken a hit as major economies   
   push to reorder global supply chains and bring a bigger slice of manufacturing   
   and investment back home. Some economists now see global trade growing more   
   slowly in the years    
   ahead than the global economy, reversing a yearslong trend that was a hallmark   
   of deepening economic integration.   
      
   “That is a sign of deglobalization showing up in the trade data,” said   
   Gene Ma, head of China research at the Institute of International Finance in   
   Singapore.   
      
   The value of goods shipped overseas from China fell 12.4% in June compared   
   with a year earlier, to $285 billion, China’s General Administration of   
   Customs said Wednesday, after falling 7.5% in May. That was worse than the   
   9.2% fall economists polled by    
   The Wall St. Journal were expecting.   
      
   For Beijing, the steepening downturn in global trade intensifies the growth   
   challenge facing the world’s second-largest economy. A consumer-led recovery   
   is fading as households contend with a weak labor market and a drawn-out   
   downturn in China’s real-   
   estate market, scotching hopes for a vigorous rebound from almost 3 years of   
   strict Covid-19 controls.   
      
   China’s exports to the U.S. fell 24% in June compared with a year earlier.   
   Shipments to the European Union sank 13% and sales to the Association of   
   Southeast Asian Nations, a group of 10 countries that includes Indonesia and   
   Malaysia, fell 17%.   
      
   U.S. imports of goods were 5.5% lower in the first five months of the year   
   than the same period a year earlier, Census Bureau data shows. Goods imports   
   fell 2.7% in May compared with April, after recording a brief rebound in March.   
      
   Economists don’t expect a revival in trade until later in the year, assuming   
   recession in the U.S. and other major economies is mild.   
      
   Behind China’s headline export data are signs of shifting patterns of trade   
   in the global economy.   
      
   A growing share of China’s exports are heading to regions including the   
   Middle East and Latin America, reflecting strengthening economic links thanks   
   to Chinese investment and its hunger for natural resources. Exports to Russia   
   surged in June,    
   reflecting close ties between Moscow and Beijing and the effect of Western   
   sanctions on Russian imports.   
      
   China is also finding success exporting cheap electric cars and smartphones to   
   emerging markets, edging out much more expensive Western alternatives. The   
   country surpassed Japan as the world’s biggest exporter of vehicles in the   
   first quarter of 2023.   
      
   The shift also reflects worsening relations between China and the U.S.-led   
   West that are crimping trade. Tariffs on a range of goods mean China accounted   
   for around 15% of U.S. imports in the 12 months through May, down from more   
   than 20% before former    
   President Donald Trump hit a range of Chinese goods with tariffs in 2018.   
      
   Still, China continues to dominate global trade as it pushes deeper into   
   markets other than the U.S. China’s overall share of global goods exports   
   was 14.4% in 2022, up from 13% the year before the pandemic and 11% in 2012,   
   according to World Trade    
   Organization data. The U.S. in 2022 accounted for 8.3% of global goods exports   
   and Germany, 6.6%.    
      
   Economists are wrestling with how a shift in major economies away from   
   unfettered globalization will affect economic growth, investment and trade.   
   The U.S., Europe and Japan have rolled out major subsidy packages for   
   semiconductor manufacturing and green    
   technology investments, an effort aimed in part at reducing their reliance on   
   supply chains dominated by China.   
      
   The IMF said in a recent report that it anticipates global investment by rich   
   countries will increasingly flow toward other advanced economies, to the   
   detriment of developing nations that need foreign investment to spur economic   
   development.   
      
   Though some economies might benefit as manufacturing activity relocates out of   
   China, economists fret the overall effect of such barriers to free-flowing   
   trade will be harmful.   
      
   “The aggregate impact on global GDP is negative,” said Alex Holmes, senior   
   economist at Oxford Economics in Singapore.   
      
   https://www.wsj.com/articles/chinas-drop-in-exports-signals-deep   
   ning-slowdown-in-global-trade-df03bb29   
      
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