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Cooling of China's imports concerns trade partners

Tuesday, November 11th 2008 - 20:00 UTC
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China's trade surplus rose to 35.2 billion US dollars in October, hitting a record for a third month in a row, data shows. The surplus rose 20% from September's 29.36 billion high, according to data from the Customs Department in Beijing.

Despite the rise, there were signs that foreign demand for Chinese goods was beginning to slow amid the downturn. Separate data showed inflation fell to a 17-month low, increasing the chance of further interest rate cuts as China acts to boost its economy. China has set out a 586 billion economic stimulus plan to counter slower foreign demand by boosting domestic spending. The plan, announced on Sunday, is aimed at increasing domestic growth by cutting taxes and investing in infrastructure projects. A lot of that is money that had previously been allocated and will take time to work through to the economy. Zhu Jimin, chairman of Shougang, one of China's leading steelmakers, told an industry conference that the industry may see a 20.0% fall in output in 2009 as "the steel market needs time to recover even with the stimulus plan." While the trade surplus hit a record last month, the figures showed that overseas appetite for Chinese goods was cooling with exports up 19.1% compared to a year earlier totalling 128.3 billion, but falling from September's 21.5% growth. Imports rose 12.4% to 93.1 billion compared with September's 21.3% growth rate, as demand at home cooled. China's monthly surplus with the US increased 13.6% year-on-year while its surplus with Europe climbed 12.2%, according to the national customs agency. There have been fears that if China's economy slows, it will have significant repercussions globally. Recent figures showed China's growth reached at annualised rate of 9% in the third quarter - though considerable it marks a slowdown from 10.1% growth in the previous quarter. China's central bank expects growth to slow to between 8% and 9% in 2009. Last month the consumer price index was at its lowest level since May 2007, figures from the National Bureau of Statistics showed. In October prices were up 4% from a year earlier, compared with 4.6% in September.

Categories: Economy, International.

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