Alarm as China trade surplus falls
CHINA'S trade surplus fell 14 per cent last month as imports and exports both dropped unexpectedly, data showed yesterday, suggesting a further slowdown in the Asian economic giant on the back of global weakness.
The figures are the latest to set alarm bells ringing over the health of China's rebound from a prolonged downtrend, as trade and manufacturing conditions worsened this year.
Exports slipped 3.1 per cent to US$174.32 billion (S$222 billion), according to figures from Customs, while imports were down 0.7 per cent at US$147.19 billion, leaving a trade surplus of US$27.13 billion.
Average expectations in a survey of 20 economists by Dow Jones Newswires had been for a 3.3 per cent rise in exports and imports to go up 5.5 per cent.
"China's foreign trade is facing grave challenges," Customs spokesman Zheng Yuesheng told reporters.
He said "prolonged sluggish foreign demand" was the main cause, followed by rising export prices in foreign-currency terms, labour costs and a deteriorating trade environment due to growing trade disputes.
Economists from ANZ Bank warned that China would not achieve its goal of 8 per cent growth in trade this year - after failing to deliver a 10 per cent gain targeted for last year - if the softness persists.
"This will not only bring about downside risk to the gross-domestic-product growth for this year, but also place severe pressure on employment," Mr Liu Ligang and Mr Zhou Hao said in a research note.
China's trade figures for last month came after the International Monetary Fund (IMF) on Tuesday cut its global-economic-growth forecast, citing new downside risks in key emerging-market economies and a deeper recession in the euro zone.
The IMF projected that the world economy would expand 3.1 per cent this year, down from its April estimate of 3.3 per cent.
China and other emerging economic powers face new risks, it warned, "including the possibility of a longer growth slowdown".