China, the world’s second largest economy’s recovery chances, is now threatened since its imports and exports fell more severely than predicted last month.
The official data demonstrates that exports plummeted 14.5% in July compared with a year earlier while imports fell by 12.4%.
The dismal trade results add to fears that the country’s economic development would decline further this year.
It will put more pressure on Beijing to aid in the post-pandemic recovery.
The data imply that rising living costs and higher borrowing costs in other areas of the world are having an impact on China’s post-pandemic recovery by limiting demand for its commodities.
The announcement triggered a sell-off on Asian stock exchanges, with the Shanghai Stock Exchange falling 0.2% and Hong Kong’s Hang Seng falling 1.9% at the conclusion of the trading day.
Investors are concerned that economic activity will continue to stagnate, resulting in a drop in manufacturing and foreign investment.
Weak domestic demand in China is also weighing on the recovery, after three years of heavy lockdowns and restrictions to stop the spread of coronavirus.
China’s coronavirus regulations were among the strictest in the world. From March 2022, the financial metropolis of Shanghai, home to around 25 million people, was placed under full lockdown, with the government sending food supplies to citizens imprisoned in their homes.