Main­land July ex­ports, im­ports drop amid worry

The China Post - - FRONT PAGE -

Main­land China’s for­eign trade per­for­mance wors­ened in July with both ex­ports and im­ports fall­ing on an an­nual ba­sis, cus­toms said on Satur­day, spell­ing more worry for the world’s sec­ond largest econ­omy.

Ex­ports plunged 8.3 per­cent year-on-year to US$195.10 bil­lion while im­ports dropped 8.1 per­cent to US$152.07 bil­lion, it said in a state­ment on its web­site.

The coun­try still recorded a trade sur­plus of US$43.03 bil­lion, cus­toms said, but gave no com­par­a­tive fig­ure. Sep­a­rately, the agency said the trade sur­plus in yuan cur­rency terms nar­rowed by 10 per­cent on the year.

Ex­ports are a key driver of main­land’s China’s eco­nomic growth, while fall­ing im­ports can in­di­cate weak do­mes­tic de­mand.

“China’s trade slump de­te­ri­o­rated fur­ther in July,” ANZ Bank­ing Group said in a re­search note. As global growth mod­er­ates and com­mod­ity prices re­main de­pressed, he said, it will be “un­likely” that main­land China’s trade growth will pick up sig­nif­i­cantly in the re­main­der of the year.

“China’s ex­ports will con­tinue to face strong head­winds,” the bank said.

The latest trade fig­ures wors­ened from June, when ex­ports in U.S. dol­lar terms eked out a 2.8 per­cent an­nual rise and im­ports still fell but a lesser 6.1 per­cent, pre­vi­ous data showed.

A stronger yuan cur­rency, which makes Chi­nese goods more ex­pen­sive over­seas, has hurt ex­ports, an­a­lysts said.

“The yuan has been stronger against the euro, and it’s hurt­ing Chi­nese ex­ports to Europe,” Li Miaox­ian, a Bei­jing-based economist at Bo­com In­ter­na­tional Hold­ings Co., was quoted by Bloomberg News as say­ing.

The main­land’s econ­omy, a key driver of global growth, ex­panded 7.4 per­cent last year, its weak­est since 1990, and has slowed fur­ther this year, grow­ing 7.0 per­cent in each of the first two quar­ters. The gov­ern­ment has tar­geted an­nual eco­nomic growth of around 7.0 per­cent for all of 2015.

The Peo­ple’s Bank of China, the cen­tral bank, in June an­nounced its latest cut in in­ter­est rates, mark­ing the fourth such move since Novem­ber to boost lend­ing as a driver for the econ­omy.

Some an­a­lysts ex­pect for­eign trade to re­main weak for the over­all third quar­ter of this year, high­light­ing the need for the gov­ern­ment to take more steps to boost the econ­omy by fur­ther mon­e­tary and fis­cal loos­en­ing.

“I do be­lieve the trade data in the third quar­ter will have the same weak­en­ing trend on-year as over­all eco­nomic growth, which we es­ti­mate will stand at 6.9 per­cent (for the quar­ter),” No­mura In­ter­na­tional’s China economist Wendy Chen told AFP.

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