HONG KONG — China’s industrial slowdown is showing signs of worsening, as the country’s trade slump deepened further in August in the face of weaker demand from overseas buyers.
Once seemingly indomitable as the world’s workshop, China is now facing its most protracted decline since the global financial crisis. Overseas shipments fell 5.5 percent last month compared with a year earlier. That has dragged total exports 1.4 percent lower in dollar terms in the first eight months of the year.
It is a sign that the country’s sprawling manufacturing sector is losing competitiveness: Labor costs are rising relentlessly and the currency, the renminbi, remains relatively strong despite its devaluation last month. Despite the currency move, Chinese goods are notably more expensive for foreign buyers than they were even a year ago.
At the same time, China’s imports are falling even more sharply, declining last month for the 10th month in a row, with a drop of 14 percent by value.
Economists say sharp drops in global prices for commodities like oil and industrial metals have propelled the decline in import value. But the sheer volume of imports of crucial industrial raw materials like coal, iron ore, copper, aluminum and steel has also fallen this year. The declines are a clear sign of weakening domestic demand in China as a slump in manufacturing and new housing construction drag on economic growth.
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