default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

China Warns Waning Global Demand Is Top Threat to Trade

Shanghai Yangshan Deepwater Port Container Cargo Terminal is normally one of the world's busiest container ports.
Overseas demand for goods from China is weakening as the global economy slows, warned a senior Chinese commerce ministry official. (Shutterstock)

Overseas demand for goods from China is weakening as the global economy slows, warned a senior Chinese commerce ministry official, though the country still expects foreign trade to grow in the second half of this year.

“The slowdown in external demand is the biggest uncertainty faced by China’s trade,” said vice commerce minister Wang Shouwen during a press conference Tuesday in Beijing. “Our companies are reporting falling orders, as the demand from major markets is declining.”

An export boom that has propelled China’s economy during the pandemic is showing signs of waning as soaring inflation and other headwinds elsewhere suppress global demand. Exports in US dollar terms expanded 7.1 percent last month, the weakest pace of growth since April when a lockdown in Shanghai disrupted ports and snarled trade.

Meanwhile, the cost of shipping goods from China has slumped to the lowest level in more than two years as the world economy stumbles.

Much of the growth in the value of trade now is due to rising prices, not to an increase in the amount of goods actually being put on ships. Shanghai’s port processed 8.4 percent less cargo in August than a year earlier, the port said earlier this month.

While Wang said China is confident it will achieve growth in foreign trade in the last six months of 2022, he cautioned that the economic slowdown in the US and Europe is a major headwind.

Elevated inflation among major economies has squeezed the consumption of goods in those places, while many overseas companies have been left with high inventories they still need to offload — thus hurting new orders, Wang said. He added that the demand for work-from-home equipment spurred by the pandemic is declining.

The Chinese government has rolled out several measures to stabilise trade, Wang said, such as last month’s big stimulus package and support for cross-border e-commerce firms to build overseas warehouses, among other measures. He noted that rapid growth in some sectors, such as cars and solar batteries, has also demonstrated the country’s good foundation in trade.

Building Resilience and Value in Fashion's Supply Chain.

Learn more:

China Factory Orders Drop in Ominous Sign for Global Outlook

Makers of Christmas decorations to clothing and tents say orders from overseas customers are drying up, with some predicting the best they can aim for is flat demand versus last year, according to more than a dozen export managers interviewed by Bloomberg News.

In This Article

© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
State of Fashion 2023
© 2022 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
State of Fashion 2023