Sat, Aug 11, 2012 - Page 15 News List

Chinese exports, imports slow

LOSING STEAM:Singapore, another export powerhouse, saw its economy contract 0.7 percent in the second quarter, as a weak global economy hammered exports


China’s exports and imports slowed for the second consecutive month last month, official data showed yesterday, highlighting worsening conditions in the world’s second-biggest economy.

The figures — sharply below market expectations — add to concerns that China’s economy is still losing steam despite government efforts to prop up growth and investment to lessen the impact of the global slowdown.

Analysts said the weak data, combined with disappointing inflation, industrial production and fixed-asset investment figures released on Thursday, created further impetus for Beijing to announce more stimulus policies.

China’s exports rose a marginal 1 percent last month from a year earlier to US$176.9 billion, the General Administration of Customs said in a statement, down from the 11.3 percent gain seen in June.

Imports rose 4.7 percent year-on-year to US$151.8 billion last month, it said, compared with the June increase of 6.3 percent, indicating slowing domestic demand.

The trade surplus narrowed to US$25.1 billion last month from US$31.7 billion in June. That marked the second straight month that both exports and imports slowed.

China, the world’s biggest exporter, has been hit by weakness in overseas economies, including debt-ravaged Europe, a key trading partner. A sluggish property market and softening consumer spending have also become a drag on the economy.

Exports to Europe fell 3.6 percent to US$192.4 billion in the first seven months of the year from the same period last year, according to the data, extending the 0.8 percent decline in the first half of the year.

Meanwhile, shipments to the US rose 11.4 percent on year in the first seven months of the year to US$195.4 billion in the period, though that was a slower pace than the 13.6 percent increase in the first six months.

“This complicates the prospects for an imminent recovery,” IHS Global Insight economists Ren Xianfang (任現芳) and Alistair Thornton said, referring to last month’s trade data.

“With the export sector losing speed faster than expected, the government’s current investment stimulus plan looks woefully inadequate,” they wrote in a research note.

“The government is likely to respond by ramping-up its stimulus efforts, with both monetary and fiscal guns firing,” they added.

Zhang Zhiwei (張智威), an economist with Nomura International (HK) Limited, expects exports to remain weak in the coming months as suggested by flat growth in imported parts for re-export purposes last month.

“The set of weak macro data puts more pressure on the government to loosen policies,” he said in a note.

Separately, Singapore’s economy shrank 0.7 percent in the second quarter, the government said yesterday, although the decline was at a slower pace than expected.

The government also revised its overall growth forecast for this year to 1.5 to 2.5 percent, from 1 to 3 percent, figures first flagged by Singaporean Prime Minister Lee Hsien Loong (李顯龍) in a speech on Wednesday.

The April-to-June contraction was a sharp deterioration from Singapore’s 9.5 percent annualized quarter-on-quarter GDP growth in January-to-March, but better than estimates last month for a 1.1 percent fall.

Declines in export-driven sectors, such as electronics, which are key elements of Singapore’s trade-oriented economy, were the main factors behind the weak second quarter showing, the Ministry of Trade and Industry said.

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