China’s Export Decline: A Six-Month Low Sparks Market Reactions and Economic Concerns
China’s Exports Drop to Six-Month Low, Falling Short of Forecasts; Impact Seen in Hang Seng Index and Australian Dollar
September 8, 2025 — By Bob Mason
China’s exports slowed in August. Growth touched its weakest pace since January 2025. The numbers did not meet most experts’ numbers. This slower pace sent shocks into nearby markets. The Hang Seng Index in Hong Kong fell, and the Australian dollar felt the strain from ties with China.
Export Slowdown Details
New trade numbers show China’s exports grew 4.4% year-on-year in August. This rate is much slower than July’s 7.2% rise. The 4.4% figure missed most experts’ 5% prediction. This gap stoked fears about lower demand from abroad. Imports also slowed. They rose 1.3%, far below the expected 3% rise and down from a 4.1% increase last month.
The drop comes partly as sellers rushed to ship goods before U.S. tariffs began. The tariffs have changed trade paths. Southeast Asian partners now fill in as supply hubs. In one case, a trade pact in Vietnam brings a 40% tariff on goods in transit. In another, Indonesian goods face a 19% fee when shipped to the U.S.
Broader Economic Indicators and Expert Views
China’s Manufacturing Purchasing Managers Index made a small gain from 49.5 in July to 50.5 in August. The new number shows that production activity barely stayed in neutral territory. New export orders have fallen for five months in a row. These orders show that demand for goods remains low. Meanwhile, new business in services has grown at the fastest rate since May 2024. This growth shows some strength in the service sector.
Alicia Garcia Herrero, Chief Economist for Asia Pacific at Natixis, warned that export growth may shrink further. She said export growth could slow to 2-3% in Q3 2025 and drop to 1% in Q4. She noted that simple goods like furniture, clothing, footwear, and toys can be made in many places. Garcia Herrero mentioned that even bicycles meant for export to America are sold cheaply on Chinese websites, a sign of too many goods available.
Market Reaction
After the trade numbers came out, markets reacted fast. The Hang Seng Index in Hong Kong rose briefly to 25,545 points before falling slightly to 25,435. By the morning of September 8, the index was a bit higher at 25,515 points. Hopes for a U.S.-China trade deal and extra policy help gave some support. In contrast, stocks in Mainland China showed weakness. The CSI 300 dropped by 0.26% and the Shanghai Composite fell by 0.09%.
The Australian dollar (AUD/USD) also reacted. The pair fell from $0.65674 to a low of $0.65546 soon after the numbers came out. The AUD/USD then recovered a bit. By the morning of September 8, it closed near $0.65624. This reaction reflects Australia’s strong trade links with China. About one-third of Australia’s exports and more than half of its trade-to-GDP depend on China. These ties make the currency sensitive when new data appears.
Looking Ahead: Beijing’s Policy Moves and Inflation Data
Market watchers will keep a close eye on Beijing now that the Standing Committee of the National People’s Congress begins its sessions on September 8. Many hope that new steps will be taken to support growth in difficult times.
Key inflation data comes on September 10. The consumer price index and producer price index will show how weak export demand and tougher global competition affect prices. If prices fall, companies may face tighter margins and a change in market mood.
About the Author:
Bob Mason has more than 28 years of experience in the finance world. He has worked with global rating agencies and multinational banks. His work covers currencies, commodities, alternative assets, and global stocks with a focus on European and Asian markets.
For a detailed economic calendar, market forecasts, and trading strategies, visit FXEmpire’s resources.
Full money-growing playbook here:
youtube.com/@the_money_grower
