China’s exports to the U.S. dropped by 28 percent in dollar value and 17.2 percent worldwide in January and February.
China imported 4 percent less overall during those two months, although imports from the U.S. rose 2.5 percent.
As China’s industrial output plunged at the sharpest pace in 30 years, down 13.5 percent in the first two months of the year, it recorded a trade deficit of $7.1 billion.
Fixed asset investment fell 24.5 percent year-on-year, while the private sector investment dove 26.4 percent from a year earlier.
Retail sales shrank 20.5 percent year-on-year as the coronavirus had consumers either in quarantine or staying away from shopping malls, restaurants, and movie theatres.
As the virus spread, China’s jobless rate rose to 6.2 percent in February, compared with 5.2 percent in December.
More than 2,000 of China’s roughly 2,550 companies involved in foreign trade are back at work. Less than a third of small and medium-size businesses, however, which employ more than 80 percent of China’s manufacturing workforce, are up to full working capacity.
The global market meltdown and coronavirus spread will decrease demand for Chinese exports. Thus, there will be less need for China to import parts or raw materials from other countries, which in turn is dragging down commodity prices such copper, which China imports some 50 percent of world production.
TREND FORECAST: The virus outbreak has cast doubt on China’s ability to fulfill its pledge to buy an additional $200 billion of U.S. exports this year.
While China has cut several key interest rates since late January and another reduction in its lending benchmark rate is expected this week, rate cuts, as evidenced by those taken by central banks globally, will do little to stimulate economic growth.
Furthermore, as its economy severely retracts, we forecast increased civil unrest throughout the nation.
