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English>>China Business

Economic rebound lacks gas

By Li Jiabao, Ding Qingfen and Xie Yu (China Daily)

10:59, August 12, 2012

Sharply slowing export growth together with a slump in bank loans and industrial output in July are pointing to a prolonged slowdown for the world's second largest economy.

China's exports increased 1 percent year-on-year in July, the worst growth since 2009, reflecting how the global economic slowdown has weakened demand for Chinese exports, the General Administration of Customs said Friday.

Meanwhile, data from the People's Bank of China, the central bank, showed that China's bank lending slumped 41.3 percent in July from the previous month, the lowest monthly figure since September 2011.

Chinese banks extended 540.1 billion yuan ($84.9 billion) in new loans in July, compared with 919.8 billion yuan in June, the bank said.

The set of poor macroeconomic data put more pressure on the government to loosen policies, said Zhang Zhiwei, an economist with Nomura.

China's foreign trade increased by 2.7 percent from a year earlier in July. Exports edged up by 1 percent year-on-year while imports grew by 4.7 percent, yielding a trade surplus of $25.15 billion. The first seven months saw China's trade rise by 7.1 percent from a year earlier, according to customs.

"The sluggish demand in the EU market, caused by the deepening debt crisis in the bloc, was responsible for China's slowed trade growth in the first half of this year," Gao Hucheng, vice-minister of commerce, said at a press briefing of the Ninth China-ASEAN Expo and the Ninth China-ASEAN Business and Investment Summit held in Beijing on Friday.

"Amid the spreading global debt crisis and the slowdown of China's economic growth, the country's foreign trade will face more pressure and a more challenging outlook in the second half of this year. And there is certain pressure in achieving the goal of 10 percent trade growth this year," Gao said.

Zhang from Nomura said that export growth will likely be weak in the coming months as well.

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