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China’s Slowdown Spills Over to Major Economies Through Imports

  • China’s headline data hides decline in hi-tech goods imports
  • Germany and South Korea post unusual trade deficits with China

China’s economic slowdown is spilling over to major exporting nations in Europe and East Asia through falling demand for manufactured goods, causing Germany and South Korea to post rare deficits with the world’s second-largest economy.

Elevated global commodity prices meant that China’s official import growth of 1% in June from a year earlier hid a worse result for manufactured goods. Imports of hi-tech products and mechanical and electrical goods fell about 8% last month, according to recently released Chinese customs data. There doesn’t seem to have been an improvement this month, with South Korea’s exports to China falling 2.5% in the first 20 days of July.