China exported 6.2 percent fewer goods in September than in August, notching the fifth consecutive month of declines, although the rate of decline slowed from 8.8 percent the month before. Imports also shrank by 6.2 percent, according to customs data reported by the Associated Press.

Exports to the U.S. dove 16.4 percent, year on year, while shipments to European Union countries were off 11 percent.

Imports from Russia, chiefly petroleum products, climbed 12.7 percent in September, year over year, to $11.53 billion.

Still, China managed to boost its trade surplus from $68.36 billion in August to $77.71 billion in September.

A weak global economy was responsible for China’s lackluster export sector, customs official Lu Daliang told a press briefing. Global demand weakened as the post-COVID buying spree ran its course, inflation picked consumers’ pockets, and central banks raised interest rates to multi-decade highs.

A range of policy tweaks helped the economy contract at a slower pace, the AP said.

“Measures of foreign orders point to a more substantial decline in foreign demand than what has been reflected in the customs data so far,” China economist Zichun Huang at Capital Economics wrote in a note. 

“The lagged impact of higher interest rates is likely to dampen consumer spending in major export markets over the next few quarters,” he predicted. 

China is falling back on government-funded construction to add to GDP, Huang noted, which could boost demand for imports of raw materials and fuel.

TREND FORECAST: China’s economy has been hit by a double whammy: export markets have shrunk and consumer spending has not perked up. 

This is the opposite of the country’s “dual circulation” economic strategy announced by president Xi Jinping in 2020: a thriving consumer economy and booming export market were supposed to complement each other. Instead, as a result of his launching the COVID War in January 2020, on Chinese Lunar New Year, “The Year of the Rat, both have shrunk at the same time.

China’s domestic consumer economy never materialized since then. The COVID War ended China’s celebrated economic boom of the past 20 years which relied on strong export markets, strong domestic economic growth and massive government-funded infrastructure spending.  

Now China’s export markets are shrinking as countries re-shore or “friendshore” their supply lines. A low-growth world economy also will blunt exports for the foreseeable future. Without a strong manufacturing economy, there is scant basis for a strong consumer economy either.

China will remain a key player in the world economy but not at its previous scale. As Insider declared in a recent analysis, “it’s official: the era of China’s global dominance is over.”


Chinese consumer prices fell flat in September after perking up by 0.1 percent in August, signaling that Beijing’s policy measures to revive the economy have had little effect. After a brief hop early this year following the lifting of anti-COVID restrictions, shoppers returned to saving instead of spending.

Economists in a Wall Street Journal poll had expected prices to rise 0.2 percent, twice the actual result.

September’s stagnant consumer spending and August’s scant increase raises prospects that deflation in China’s economy will continue.

Manufacturers charged 2.5 less for their products last month, a slight improvement from August’s 3-percent discount.

The country’s two-year-old property crisis continues to fester. An impending default by China’s last remaining solvent property developer shook investors once again. (See “China’s Real Estate Crisis Deepens” 26 Sep 2023.)

Exports and imports both continued a months-long decline in September, as we report in “China’s Exports, Imports Still Shrinking” in this issue.

Earlier this month, the International Monetary Fund (IMF) cut its outlook for China’s economic growth this year to 5 percent and 4.2 percent in 2024. In July, the fund had foreseen growth at 5.2 and 4.4 percent.

Beijing had set a 5-percent growth target for the country this year.

China’s economic quagmire prompted the IMF to also shave its 2024 global growth forecast from 3 percent to 2.9.

Although consumer spending flatlined last month, core inflation—which ignores food and fuel prices—held at an eight-month high of 0.8 percent, showing that a weak consumer economy is only partly responsible for the lack of price increases, the WSJ noted.

TREND FORECAST: As China’s economy languishes, the likelihood grows that Beijing will become more aggressive and assertive on the international political and military stage.

When regimes are failing at home, they often invent external enemies to blame and seek to direct their public’s attention to outside threats and away from domestic failures.

Governments also are aware that war is good business: it spurs production and more people have jobs.

While China is unlikely in the current environment to start a hot war over Taiwan, it is likely to cause more ruckus internationally and a war over Taiwan cannot be ruled out.

As Gerald Celente says, “When all else fails, they take you to war.”

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