|Girish Shetti |||Nov 09, 2016 10:15 AM EST|
(Photo : Getty Images) China’s export and import continued its free fall in the month of October, with export falling by 7.3 percent and import declining by 1.4 percent.
With global demand showing no signs of improvement, China's export and import continued its freefall in the month of October. However, the drop was not as steep as in September.
Exports in October dropped by 7.3 percent from a year earlier on dollar denominated basis, while imports declined by 1.4 percent. This has taken China's trade surplus to $49.06 billion, much higher than the $41.99 billion clocked in September.
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In local denomination terms, exports dropped by 3.2 percent, while imports increased by 3.2 percent.
The yuan's value has dropped by nearly seven percent against the U.S. dollar over the years, helping exports to marginal perform better. Experts claim that October's export figures could have been even better if the yuan had weakened slightly more against the greenback.
October's trade data will certainly put more pressure on China's export market, as this is the seventh month of straight fall in the country's export in a single year.
Commenting on October's trade figures, an economist at ANZ Bank said: "Our conclusion is that external demand remains sluggish but it has not worsened significantly. Although both exports and imports have fallen short of expectations, they have improved on a year-on-year basis."
China's export and import data clearly underscore the fragile nature of the country's and the global economy. However, many economists are still optimistic that the world's second largest economy is steadily heading towards recovery.
"If we look at the series of numbers coming out from China over the past 5-6 months, the trend is getting better," Ayaz Ebrahim, head of Asia Pacific asset allocation, EM and APAC equities team, at J.P. Morgan Asset Management, told CNBC.
The Chinese economy has been on a continuous slide for over a year, with experts describing the slowdown as the worst the country has seen for over two decades. The government, however, has been forthcoming in dosing the fear that slowdown may force the economy into a hard landing.
The Chinese government has taken several important measures to propel the country's economy towards long term recovery. It has announced billions of dollars in stimulus packages to help recession-hit industries. However, recovery seems to be still far away for the world's second largest economy.
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