Recession is coming Chinese exports fell in july again
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China’s exports are expected to decline further in the coming months. The reason for this is that there are signs of slowdown in global demand. Especially in developed countries people are not spending much. Due to this, the fear of recession at the end of this year has also increased. Although experts say that it can be very minor. In the first seven months of this year, China’s exports declined by five percent compared to last year. Especially China’s exports to America have dropped by 13 percent. America is China’s largest trading partner. China had imposed a strict lockdown during the Corona period, but despite this the country’s exports were not much affected. Last year, exports accounted for 17 percent of China’s GDP.
Why exports are falling
But since October last year, China’s exports have been steadily declining. Inflation and rising interest rates have had a significant impact on global demand. China’s economy has suffered a major setback due to the weakening of exports. There are signs of deflation in the country, which is raising the possibility that China may also get stuck in a long period of stagnation like Japan. According to Tuesday’s data, China’s imports in July also fell by 12.4 percent compared to the previous year. It is clear from this that the domestic demand of the country has also become sluggish. The country’s imports have reached their lowest level this year.
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Analysts say that China needs to take concrete steps to revive the economy. It also includes measures to increase demand. The weakening of the currency can help exports to China. So far, the measures taken by China to boost the economy have failed to woo investors. In such a situation, the devaluation of Yuan can boost China’s exports and bring China’s economy back on track.
Germany’s difficulty also increased
Meanwhile, industrial production in Germany, Europe’s largest economy, declined by 1.5 percent in June. This is more than expected. The maximum decline of 3.5 percent was in the automotive sector. Due to this, once again the fear of Germany getting stuck in recession has increased. Germany has recently come out of recession. Between April and June, the country’s GDP remained flat as compared to last year. But from the recent figures, it seems that the slight improvement in the country’s economy is not going to last for long. The auto sector has been hit the most. Europe’s largest car maker Volkswagen is facing difficulties in China. The company’s biggest market is China but its deliveries in China declined by 14.5 per cent in the first quarter.
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