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China’s June fall in exports and imports anticipate grim outlook for world trade

Thursday, July 11th 2013 - 06:34 UTC
Full article 2 comments
Rising labor costs and a strong Yuan currency challenge Chinese exports Rising labor costs and a strong Yuan currency challenge Chinese exports

China has warned of a grim outlook for trade as the world's second-largest economy surprised financial markets by reporting a fall in exports and imports when both had been expected to rise. The June data showed that exports fell 3.1% from a year earlier and imports dropped 0.7%, according to customs officials.

The figures, which follow a government crackdown on the use of fake invoicing that had exaggerated exports earlier this year, are likely to raise fresh concerns about the extent of the slowdown in the economy and global demand.

“China faces relatively stern challenges in trade currently,” customs spokesman Zheng Yuesheng told a news briefing. “Exports in the third quarter look grim.”

The customs agency said exporters were losing confidence in the face of weak overseas demand, rising labor costs and a strong Yuan currency. The export fall was the first since January 2012. Economists had expected exports to increase 4.0% and imports to rise 8.0%.

China's trade data is volatile and has been distorted by speculative capital flows across the country's border. Doubts about the accuracy of the figures had abated slightly since the customs office and top foreign exchange regulator launched a campaign in May to crack down on fake export invoices.

Fake invoicing inflated China's official import and export totals by 75bn dollars in the first four months of 2013, local media reported on 14 June, citing an internal review by China's commerce ministry.

The customs data showed that exports to the United States, China's biggest export market, fell 5.4%, while exports to the European Union dropped 8.3%.

China had a trade surplus of 27.1bn in June, the customs administration said, largely in line with the 27bn expected by economists.

China's reform-minded new leaders have shown a tolerance of slower growth, although they still need to avoid widespread job losses that could threaten social stability. Economists expect data next week to show that annual growth in China for the April-June quarter slowed down to 7.5%.

A continued slide in growth could test Beijing leaders' resolve to tolerate a short-term slowdown in the economy while pressing ahead with efforts to revamp the economy for the longer term, with all the political implications such a move could have.
 

Categories: Economy, International.

Top Comments

Disclaimer & comment rules
  • Anglotino

    China is Japan 20 years ago.

    And that should scare the crap out of the Chinese oligarchs that run the country.

    Jul 11th, 2013 - 06:48 am 0
  • Briton

    Roll up-roll up,
    Join the china bubble, plant of shares for everyone,

    They even have plumbers encase of bursts,

    Mug , investors , or the foolish,
    One has been warned
    This bubble will burst, as it has thinned rubber and to much hot air..lol
    .

    Jul 11th, 2013 - 07:25 pm 0
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