12.8

Slow­down con­tin­ues as con­sumers curb spend­ing

7 Days in Dubai - - BUSINESS -

China’s trade shrank in April in a sign gov­ern­ment stim­u­lus is fail­ing to jolt the world’s sec­ond-largest econ­omy out of a pro­longed slow­down.

Ex­ports con­tracted by 1.8 per cent from a year ear­lier to $172.7 bil­lion, fall­ing back into neg­a­tive ter­ri­tory af­ter March’s tem­po­rary burst of 11.5 per cent growth, cus­toms data showed yes­ter­day. Im­ports plunged 10.9 per cent to $127.2 bil­lion af­ter the pre­vi­ous month’s 13.8 per cent con­trac­tion.

Weak de­mand from con­sumers in China, which is one of the UAE’s big­gest trade part­ners, and world­wide is ham­per­ing gov­ern­ment ef­forts to re­verse an eco­nomic slow­down that dragged growth to a seven-year low of 6.7 per cent in the first quar­ter of the year.

Bei­jing has eased con­trols on credit growth and real es­tate pur­chases in hopes of stim­u­lat­ing ac­tiv­ity but an­a­lysts said the im­pact was likely to be tem­po­rary. They said March’s un­ex­pect­edly strong trade growth also was a fluke due to com­par­i­son with weak num­bers last year and the re­sump­tion of busi­ness af­ter the Lu­nar New Year hol­i­day in Fe­bru­ary.

Sur­veys of man­u­fac­tur­ers showed fac­tory ac­tiv­ity weak­ened in April and the num­ber of peo­ple em­ployed de­clined.

The rul­ing Com­mu­nist Party is in the midst of a marathon ef­fort to nur­ture more self-sus­tain­ing growth based on do­mes­tic con­sump­tion in­stead of trade and in­vest­ment. But its plans call for trade to keep grow­ing in or­der to avoid job losses in ex­port-re­lated in­dus­tries that em­ploy tens of mil­lions of work­ers.

Eco­nomic growth has de­clined steadily over the past five years. Much of that was in­ten­tional but the un­ex­pect­edly se­vere weak­ness over the past two years has forced Bei­jing to re­sort to mul­ti­ple rounds of mini-stim­u­lus through stepped up bank lend­ing and spend­ing on con­struc­tion of pub­lic works.

So far this year, ex­ports have con­tracted by 7.6 per cent com­pared with a year ear­lier and im­ports are down 12.8 per cent. That is down sharply from pre­vi­ous years when trade grew by dou­ble dig­its.

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