Chinese foreign trade has slowed in the wake of the US-China trade dispute at the end of last year. US dollar-denominated exports fell 4.4 percent in December compared to the same month last year, the Beijing government said. Imports declined even more strongly by 7.6 percent. In addition, the data for November were revised downwards. The cause, apart from the tariff dispute, is also the slower economic growth in China,
Experts initially expected at least slight growth for both exports and imports at the end of the year. However, exports and imports did not fare as well in December as they had in about two years.
The balance sheet for the full year 2018, on the other hand, is more positive. China's exports rose by about ten percent compared with the previous year, and imports increased by about 16 percent. However, the export surplus was the lowest in five years, which can also be interpreted as a sign of weakness.
The weak development of foreign trade can be attributed to both internal and external factors. On the one hand, the slowdown in the global economy in recent months has led to lower foreign demand for Chinese goods. Second, China's weak imports are a result of weakening domestic demand. However, China's function as a "workbench of the world" also plays a role here. China, for example, imports intermediate goods and raw materials from other countries in order to process them further.
On the financial markets, existing economic fears were compounded by the numbers. In Asia, most exchanges reacted with price losses. In the foreign exchange market, the Australian and New Zealand dollars weakened as Australia and New Zealand maintain close trade links with China.
Auto sales go back for the first time since the 90s
The result is additionally burdened by weak figures for car sales in China: According to current figures, sales in full-year 2018 declined for the first time in 28 years. In December, sales had declined for the sixth consecutive month, so that sales fell in the year by 2.8 percent to 28.1 million vehicles, said the Automobile Association CAAM. The reason given by the association was the higher tariffs in the trade war between China and China United States and the elimination of tax benefits. Originally, the CAAM had estimated an increase of three percent for the world's largest car market.
Demand weakness hit the volume market in particular, while the premium market dominated by German carmakers continued to grow. Among the western manufacturers, the US automaker Ford posted a minus of 37 percent. Volkswagen also recorded a slight decline in sales. Daimler, BMW and the Volkswagen subsidiary Audi, however, were able to sell more new cars.
In the Chinese automakers, the company Geely, major shareholder at Daimler, a rise of 20 percent – but after a rise by two-thirds the year before. For 2019, the car maker and the CAAM expect stagnation. Some forecasts are up to two percent growth. Analysts believe that the planned, but not yet well-known economic support measures of the government could positively influence the car market.