BEIJING, Nov 8, (APP/AFP): Chinese exports sank for a seventh
consecutive month in October, data showed Tuesday, as weak global demand dealt a blow to the world’s number two economy following recent signs of stability.
The result, which also missed forecasts, comes as the country’s
export-oriented companies see their margins squeezed by rising labour costs and increasing competition from southeastern Asian countries.
Overseas shipments fell 7.3 percent on-year, while imports also fell
1.4 percent, with both coming in below expectations in a survey of economists by Bloomberg News.
China is the world’s biggest trader in goods and its performance
affects partners from Australia to Zambia, which have been battered as its expansion has slowed to levels not seen in a quarter of a century.
With exports totalling $178.2 billion and imports $129.1 billion the
trade surplus dropped to $49.1 billion in the month.
Customs earlier gave the figure in yuan terms, showing a 3.2 percent
drop in exports and a 3.2 percent increase in imports on-year.
Analyst Julian Evans-Pritchard of Capital Economics said the outlook
appeared challenging with “global and domestic growth unlikely to accelerate
much further”.
“The current pace of global growth is likely to be as good as it gets
for the foreseeable future.”
Though the yuan currency’s value has slid to a series of six-year
lows against the greenback in recent weeks, making Chinese goods cheaper for trade partners, it has not been enough to lift exports into positive territory.
The yuan weakened further Tuesday after the People’s Bank of China
said the country’s foreign exchange reserves dropped nearly $46 billion in October, their second-largest decline this year as capital outflows eat into the world’s largest stockpile.
While Tuesday’s trade figures disappointed, analysts with ANZ said
they suggested that external demand had “not worsened significantly” despite earlier data on factory activity that pointed to a larger decline.
Beijing is seeking to transition the economy away from being the
world’s factory floor for cheap goods to supplying the country’s growing consumer needs.
“Trade’s contribution to China’s economy is now diminishing as the
economy increasingly depends on domestic demand,” Zhu Qibing, chief macro economy analyst at BOCI International in Beijing told Bloomberg.
Authorities have set a growth target of 6.5 to 7 percent for the
year, which they are on track to meet thanks to loose credit, a red-hot real-estate sector, and fiscal stimulus spending on infrastructure.
Government figures last month showed growth was steady at 6.7 percent
in the third quarter, a sign of stabilisation after years of slowing.
Investors shrugged off latest trade figures, with Chinese stocks
moving solidly higher by the noon break Tuesday.