China ex­ports drop a 7th straight month in Oct

Kuwait Times - - BUSINESS -

Chinese ex­ports sank for a sev­enth con­sec­u­tive month in October, data showed yes­ter­day, as weak global de­mand dealt a blow to the world’s num­ber two econ­omy fol­low­ing re­cent signs of sta­bil­ity. The re­sult, which also missed fore­casts, comes as the coun­try’s ex­port-ori­ented com­pa­nies see their mar­gins squeezed by ris­ing la­bor costs and in­creas­ing com­pe­ti­tion from south­east­ern Asian coun­tries.

Over­seas ship­ments fell 7.3 per­cent onyear, while im­ports also fell 1.4 per­cent, with both com­ing in be­low ex­pec­ta­tions in a sur­vey of econ­o­mists by Bloomberg News.

China is the world’s big­gest trader in goods and its per­for­mance af­fects part­ners from Aus­tralia to Zam­bia, which have been bat­tered as its ex­pan­sion has slowed to lev­els not seen in a quarter of a cen­tury. With ex­ports to­talling $178.2 bil­lion and im­ports $129.1 bil­lion the trade sur­plus dropped to $49.1 bil­lion in the month.

Cus­toms ear­lier gave the fig­ure in yuan terms, show­ing a 3.2 per­cent drop in ex­ports and a 3.2 per­cent in­crease in im­ports on-year.

An­a­lyst Ju­lian Evans-Pritchard of Cap­i­tal Eco­nom­ics said the out­look ap­peared chal­leng­ing with “global and do­mes­tic growth un­likely to ac­cel­er­ate much fur­ther”. “The cur­rent pace of global growth is likely to be as good as it gets for the fore­see­able fu­ture.” Though the yuan cur­rency’s value has slid to a se­ries of six-year lows against the green­back in re­cent weeks, mak­ing Chinese goods cheaper for trade part­ners, it has not been enough to lift ex­ports into pos­i­tive ter­ri­tory.

The yuan weak­ened fur­ther yes­ter­day af­ter the Peo­ple’s Bank of China said the coun­try’s for­eign ex­change re­serves dropped nearly $46 bil­lion in October, their sec­ond-largest de­cline this year as cap­i­tal out­flows eat into the world’s largest stock­pile.

While yes­ter­day’s trade fig­ures dis­ap­pointed, an­a­lysts with ANZ said they sug­gested that ex­ter­nal de­mand had “not wors­ened sig­nif­i­cantly” de­spite ear­lier data on fac­tory ac­tiv­ity that pointed to a larger de­cline. Bei­jing is seek­ing to tran­si­tion the econ­omy away from be­ing the world’s fac­tory floor for cheap goods to sup­ply­ing the coun­try’s grow­ing con­sumer needs. — AFP

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