China’s trade growth slows, surplus narrows
Thursday, October 13, 2011
BEIJING (AP) — China’s export growth fell in September in a sign of the West’s malaise and a setback for hopes Chinese demand will help prop up a shaky global economy.
The slump in Western nations will hurt struggling Chinese exporters and raise the specter of politically sensitive job losses. Economies such as Australia and Japan that supply raw materials and components to China also might suffer because its export manufacturers account for half of Chinese imports and are cutting orders.
Export growth fell to 17.1 percent over a year earlier, down from August’s 24.5 percent, customs data showed Thursday. Import growth also fell, while China’s politically sensitive trade surplus narrowed to $14.5 billion.
China’s domestic demand also has weakened following repeated interest rate hikes and investment curbs as the government tries to steer growth that hit 9.5 percent in the quarter ending in June to a more sustainable level.
“I don’t think it can singlehanded drive growth for other countries,” said Royal Bank of Scotland economist Li Cui.
Despite slower growth, September exports appeared to be a new monthly record high at $169.6 billion. Imports were $155.1 billion.
The trade surplus was down from August’s $17.8 billion and well below July’s 30-month high of $31.5 billion.
“We expect exports to further decelerate,” Citigroup economists said in a report.
China’s September trade surplus with the United States rose 11.2 percent from a year earlier to $19.9 billion, customs data showed. The surplus with the 27-nation European Union, China’s biggest trading partner, fell 7.2 percent to $12.9 billion.
China’s swollen trade surplus and its export and currency policies are especially sensitive at a time when the United States and other governments are trying to revive growth by boosting exports.
On Tuesday, the U.S. Senate approved a bill aimed at pressing Beijing to ease exchange-rate controls that critics say keep its yuan undervalued and give its exporters an unfair price advantage.
It would allow Washington to raise tariffs on imports from countries that manipulate exchange rates to gain a trade advantage. The measure is not expected to become law because it lacks the support of the majority Republican leadership in the House of Representatives, which has yet to vote on it.
China’s foreign ministry responded Wednesday with a warning that trade ties would be “severely damaged” if the bill becomes law.
Beijing has allowed the yuan to rise gradually in value against the dollar but not as fast as critics want.
Officials including Premier Wen Jiabao have warned that an abrupt rise in the yuan would hurt exporters and wipe out jobs.
“Due to rising costs and declining profits, many Chinese export companies already have chosen close down their business,” said Sun Fanghong, an economist for Ping’an Securities in Beijing.
AP researcher Yu Bing in Beijing contributed.
General Administration of Customs of China: www.customs.gov.cn
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