Latest News:  
Beijing   Cloudy/Sunny    19 / 11   City Forecast

Home>>

Weak demand hits trade surplus

By Joy Wang  (Shanghai Daily)

08:23, October 14, 2011

China's trade surplus continued to narrow last month as export growth weakened and imports increased.

Meanwhile, analysts said the outlook for China's trade had become murkier due to talk of a trade war with the United States if a bill aimed at a stronger yuan became law.

The nation's trade surplus fell to US$14.5 billion in September as exports increased 17.1 percent year on year to US$169.7 billion while imports rose 20.9 percent to US$155.2 billion, the General Administration of Customs said yesterday.

The surplus was lower than August's US$17.7 billion, and was well below a 30-month high of US$31.5 billion in July and June's US$22.3 billion. The smaller gap in August was the first monthly surplus contraction in six months.

The pace of exports last month moderated from 24.5 percent in August, while imports softened from August's 30.2 percent.

"September export growth came in weaker than expected, driven by deteriorating demand from Europe," said Chang Jian, an economist at the Barclays Capital. "The import growth was in line with our expectation."

Chang estimated that weakening external demand will slow export growth further in the last quarter, and thus conclude a trade surplus of around US$162 billion for this year, lower than last year's US$183.1 billion.

Vice Minister of Commerce Zhong Shan said last month in Shanghai that China was not seeking a trade surplus and the country would vigorously boost imports to balance its trade this year.

However, the passage of the Currency Exchange Rate Oversight Reform Act on Tuesday by the US Senate may work to slow that effort and could even trigger a trade war if it became law.

Xue Jun, an analyst at CITIC Securities Co, said that although it was unlikely the bill would be passed by the House of Representatives, where it lacks the support of the majority Republican leadership, it had already soured the atmosphere for bilateral trade and investment.

"The persistent strong opposition by key Chinese ministries has illustrated the severity of the act," Xue said. "We can't rule out a trade war that may threaten the interests of both countries."

Qu Hongbin, chief economist at HSBC, said the bill wouldn't affect the yuan's exchange value as the US had expected, given the fact that the value of China's trade surplus has decreased to below 3 percent of China's gross domestic product, compared with more than 8 percent in 2007.

"Such a rate has fallen into a sustainable range, and we believe there is no necessity for the yuan to have a sharp appreciation," Qu said.

China's trade with the US increased 17 percent from a year earlier to US$325 billion in the first three quarters, slower than China's overall trade growth of 24.6 percent. But the US remains China's second-largest trading partner after the European Union whose bilateral trade value with China topped US$422 billion in the year to September.

Email|Print|Comments(Editor:张茜)

Leave your comment0 comments

  1. Name

  

Selections for you


  1. China wins men's team title in gymnastics worlds

  2. China's stilt shrimpers vanishing

  3. Int'l New Energy Vehicles Promotion continues in Beijing

  4. South Koreans protest against South Korea-U.S. free trade agreement

Most Popular

What's happening in China

China Folk Artist Festival held in Hangzhou

  1. Ningxia builds Asia's first ISCC solar station
  2. China: Most citizens covered by health care
  3. China's avg life expectancy reaches 73.5 years
  4. 10,000 expected at matchmaking party
  5. Authorities: 'No licenses, but X-rays are safe'

PD Online Data

  1. Challenge to the traditional view of love and marriage
  2. House means happiness? Young Chinese' home-owning dream
  3. Fighting AIDS,China is acting
  4. Worldwide Confusius Institutes
  5. Chinese Qingming Festival