| Submit your comments on this article |
| China-Japan-Koreas |
| China hit by massive drop in exports |
| 2009-03-11 |
| Chinese exports slumped 25.7 per cent in February as the collapse in global demand caught up with the country’s exporters and overshadowed a sharp rise in domestic investment. China’s exports have decreased since November, but until last month the rate of decline had been much slower than in other Asian countries with large export sectors. Economists said the headline figure for last month, which was already much worse than expected, probably masked an even steeper decline given that there was a shorter number of working days in February 2008 due to new-year holidays. “Weakness in final demand has fed along the Asian supply chain and is only now having its full impact on China,” said Mark Williams at Capital Economics. Taking into account holidays, he said, the real decline in last month’s exports was around 40 per cent. If such a rapid deterioration in exports continues the government will face ever-louder demands from Chinese companies to depreciate the currency. However, analysts said that if the drop in the trade surplus continued, having collapsed from $39.1bn in January to $4.84bn last month, international pressure to move in the other direction and appreciate the renminbi would weaken. Few economists expect China to move into a trade deficit this year, however some said they might scale back projections for the size of the likely trade surplus. After dropping 43 per cent in January, imports fell by 24 per cent last month, which some analysts said was a sign that the government’s fiscal stimulus measures were beginning to have an impact. |
| Posted by:ed |