MercoPress. South Atlantic News Agency

China’s foreign trade continued to contract in August; imports down 17%

Premier Wen Jiabao said the Chinese economy recovery is not yet steady, solid and balanced

China's exports continued to decline in August, down 23% from the same month last year. Official figures show exports fell to 103.7 billon US dollars, from 134.9 billion in August 2008. Exports of almost all major industrial products saw double-digit drops.

Imports stood at 88 billion US dollars, a decrease of 17% compared with the same month last year, but an increase of 3.4% from July. The trade surplus fell 45% from August 2008 to 15.7 billion, but was up from July.

From January to August, the country's foreign trade totalled 1.34 trillion USD, down 22.4% compared with the same period last year. Imports dropped 22.7% from a year earlier to 607.92 billion USD, and exports declined 22.2% to 730.74 billion USD.

Recent signs that recession has ended in some major economies, including China's major trading partner Japan, suggest that exports may pick up again.

But separately, Japan's economy grew 0.6% in the third quarter from the previous three months, less than the 0.9% originally estimated. This was due to fewer private-sector inventories than previously estimated, Japan's finance ministry said. Japan is the world's second-largest economy.

So far this year, China's total trade with the US fell 16.4% and its trade with Japan fell 22%. Trade with the European Union dropped nearly 21%.

“The stabilisation and recovery of the Chinese economy is not yet steady, solid and balanced,” Premier Wen Jiabao said on Thursday.

“Some of the stimulus measures will see their effect wane, and it will take time before those long-term policies show effect.”

China, which is targeting 8% economic growth this year after 10% annual growth over the past few years, has relied on its 586 billion US dollars stimulus plan to boost spending this year.

A separate survey showed investments in urban fixed assets rose 33% in the first eight months of the year, suggesting that the Chinese government is the main driver of economic growth. Industrial production increased 12.3% in the year to August after having risen 10.8% to July

New loans from Chinese banks also rebounded in August, rising to 410.4 billion Yuan (equivalent to 60 billion USD) after falling to 355.9 billion Yuan in July.

Li Xiaochao, a spokesman for the National Bureau of Statistics, said the country remained on track for its 8% annual growth target.

“So far, the main reason why the overall economy is stabilising and starting to recover is that we adopted the stimulus package to expand domestic demand” he emphasized.