China's trade surplus falls for third year as global recession hits exports
CHINA’S TRADE surplus fell for a third year in succession on weaker demand for Chinese products from its biggest trading partner, Europe, and the United States, according to the commerce ministry in Beijing.
China’s trade surplus was about €125 billion last year, which is well off a record level of €235 billion in 2008, commerce minister Chen Deming said, a sign that recession is eating into exports from the world’s second biggest economy.
However, total trade volume, which includes imports and exports, was robust, rising more than 20 per cent to €2.8 trillion, the Xinhua news agency reported, without breaking down the figure into imports and exports.
Earlier this week premier Wen Jiabao warned that business conditions might be “relatively difficult” this quarter.
Beijing is trying to juggle the need to keep economic growth buoyant while holding inflationary pressures at bay. Export growth in November slowed to 13.8 per cent, the weakest pace since they started growing again in December 2009, after the financial crisis.
Retail sales rose by a better-than-expected 17.3 per cent in the same month.
China’s trade surplus with Europe and the US has led to political friction between China and its trading partners.
The surplus is likely to play a big role in the US presidential election as politicians there accuse Beijing of keeping its yuan currency artificially low to boost exports, and it is blamed for job losses.
For their part, Chinese officials say the deficit is also Washington’s fault because of controls that block the sale of high-technology products to China and place high hurdles in the way of Chinese companies seeking to invest in the US.
Against the backdrop of slowing exports because of Europe’s debt crisis, Mr Chen said in a statement on the ministry’s website that the government was planning to roll out measures to meet the challenges of a global economic slowdown and pressure from a crackdown on real estate investment at home.
China is coming up with measures to boost domestic demand, such as tax cuts to spur consumption. There are plans to offer subsidies for people to buy cars and white goods, while the government will promote tourism and online shopping. It is also focusing on energy-saving products.
The ministry also warned that Chinese exporters were likely to encounter more trade barriers as trade protectionism rallied globally against the backdrop of a volatile recovery, Xinhua reported.