Chinese exporters are cutting prices to push for more overseas sales

Imports, meanwhile, rose just 0.5 percent in August from a year ago – a sign that domestic demand was still weak. Economists had expected a 2% increase in imports over the year.

While China’s robust exports have supported the country’s sagging economy amid weak demand, data suggest exporters have cut prices to remain competitive – a trend some economists have flagged.

A Bloomberg analysis on Tuesday also showed that the volume of Chinese exports grew faster than the increase in value in recent months.

Meanwhile, official data released on Monday showed that China’s Producer Price Index – which measures the price of goods at the factory gate – fell 1.8 percent from a year ago.

It was the 23rd consecutive month that the PPI was in negative territory, raising concerns about a “deflationary spiral” where people could delay purchases in anticipation of further price falls, further dragging down the economy.

Bank of America wrote in a note on Monday that China needed more policy support to restore consumer and industrial demand as the latest inflation data suggested that “the momentum in core inflation remains weak and domestic demand has not registered another significant improvement.”

China is under crisis for dumping cheap goods on the global market

The latest data from China showed that the country is still struggling to transform its economy in the wake of the pandemic. It faces numerous challenges, including an epic property crisis, high youth unemployment and geopolitical tensions.

Although China’s strong export performance is supporting its economy, it does not sit well with the West, which has lined up to criticize China over its barrage of cheap exports flooding world markets. They say China’s dumping and unfair trade practices have hurt their economies.

The US and European Union have already imposed high tariffs on China’s electric vehicles – a key area of ​​growth that Beijing is targeting in its economic pivot.

Beijing has consistently rejected Western criticism. Chinese authorities say the Western accusations are protectionist and aimed at curbing China’s economic growth.