China’s exports declined by 1 per cent in August 2019 as its sales to the US tumbled amid the escalating trade war between the two countries. The country’s imports too dipped by 5.6 per cent, leaving a trade surplus of $34.8 billion Economists had forecast these exports to grow by 2.2 per cent, while imports to shrink by 6.4 per cent. Shipments to the US fell 16 per cent from a year earlier.
Weak exports add pressure on China’s already-slowing economy and point to an increased need for its policymakers to beef up stimulus measures. The central bank plans to cut the amount of cash banks must hold as reserves to the lowest level since 2007, injecting liquidity into the economy with the goal of stimulating demand.
The US administration had raised tariffs on Chinese goods at the start of the month, and is set to ratchet up levies further in October and again in December if there is no breakthrough. China and the US will hold face-to-face trade negotiations in Washington in the coming weeks, after a rapid deterioration in relations last month left global investors reeling amid increasing evidence the conflict is harming both countries.