JCHINA’S TRADE growth slumped last month as the world’s second-largest economy felt the impact of economic turmoil from its most important trading partners in Europe and the US.
Exports increased by their slowest pace in seven months in September, expanding 17 per cent from a year earlier to just under $170 billion (€124 billion), compared with a nearly 25 per cent increase in August, according to customs data released yesterday.
“China’s export growth is feeling the chill from the intensifying crisis [in] and weakening demand from the West,” Qu Hongbin, an economist at HSBC, said.
Imports rose 21 per cent from a year earlier to $155 billion, slower than the 30.2 per cent August rise.
China is the world’s largest goods exporter and its trade fluctuations often provide clues to the health of the global economy.
Trade with crisis-hit Europe, China’s single biggest partner, showed the most obvious slowdown last month, with exports growing by just 9.8 per cent from a year earlier, compared with growth of 22 per cent in August.
Some analysts said Chinese officials could use the monthly contraction to fend off attacks from US politicians, who have introduced legislation to press Beijing to raise the value of its tightly managed currency.
The argument is unlikely to convince members of the US congress, though, since China’s trade surplus for the third quarter hit $64 billion, compared with $47 billion in the second quarter of this year.
On Tuesday, the US senate approved a Bill that could impose tariffs on imports from countries that deliberately keep their currencies undervalued, a charge frequently levelled at China.
The legislation is unlikely to pass through the House of Representatives but it has provoked a strong response from China.
Beijing describes it as trade protectionism, condemning the Bill as a serious violation of World Trade Organisation rules and a “ticking time-bomb” that could ignite a trade war.
Yesterday’s customs data also showed that trade slowed between China and the US in September.
China’s trade surplus, a serious point of contention with big trade partners, particularly the US, was lower than expected at $14.5 billion in September, compared with $17.8 billion in August and $31.5 billion in July.
On a monthly basis, the volume of exports to Europe also fell by 7.6 per cent in September from a month earlier, a potentially worrying sign as Chinese export volumes usually pick up in the months leading to the Christmas shopping season. – (Copyright The Financial Times Limited 2011)
