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Thursday 13 November 2008
China's Monthly Trade Surplus Surprises, Hits New High
At a time when China’s exporters are screaming for help and factories for export goods are shutting down, it is astonishing that the highest monthly trade surplus in China’s history, $35.239 billion, occurred just last month.
At a time when China’s exporters are screaming for help and factories for export goods are shutting down, it is astonishing that the highest monthly trade surplus in China’s history, $35.239 billion, occurred just last month.
According to statistics from China Customs, China’s October exports reached $128.327 billion while imports totaled $93.088 billion, growth of 19.2% and 15.6% year on year, respectively. The trade surplus during the first ten months of 2008 totaled $215.99 billion.
According to a report from Moody’s, issued yesterday, China’s imports are falling more quickly than exports, so in recent months China’s trade surplus is still very high. But the recent economic stimulation package put out by the State Council to promote infrastructure construction will likely boost demand for imported goods, so imports may rebound in the near future.
Some analysts believe China’s export industry is more flexible than it is thought to be, as most of China’s exported goods are of everyday use and not sensitive to economic cycles. The slowdown of imports has been led by the drastic fall of raw material prices on the international market.
China’s textile and steel industries are both in difficult positions. Clothing exports during the first ten months of 2008 grew by only 2.8% over the same period last year, while October steel exports totaled 4.62 million tons, a drop of 31% from September.
China’s exports to ASEAN countries are growing significantly. Between January and October, they grew by 27.7% year on year. Exports to Indonesia, Vietnam, and Thailand all grew by about 40% year on year.
19% export growth is normal for China, meaning the processing trade has not seen a major decrease. China’s exports to emerging markets have offset to some degree the decline in exports to the US and European countries. And the decrease of overseas orders will not affect exports immediately, its influence to be seen in figures for November or later.
Exchange rate movement is also having its effect on China’s export industry. Calculating the exports of the last two Octobers with the exchange rate of these two months shows that exports in RMB this October grew by only 8% year on year.
The Moody’s report said China’s decision makers need to consider the influence of strong RMB on China’s export industry during the second half of the year. It is likely the RMB will stabilize and not appreciate sharply, a situation that may continue for quite a while.
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Monthly Trade Surplus Surprises, Hits New High
13 November 2008
At a time when China’s exporters are screaming for help and factories for export goods are shutting down, it is astonishing that the highest monthly trade surplus in China’s history, $35.239 billion, occurred just last month.
According to statistics from China Customs, China’s October exports reached $128.327 billion while imports totaled $93.088 billion, growth of 19.2% and 15.6% year on year, respectively. The trade surplus during the first ten months of 2008 totaled $215.99 billion.
According to a report from Moody’s, issued yesterday, China’s imports are falling more quickly than exports, so in recent months China’s trade surplus is still very high. But the recent economic stimulation package put out by the State Council to promote infrastructure construction will likely boost demand for imported goods, so imports may rebound in the near future.
Some analysts believe China’s export industry is more flexible than it is thought to be, as most of China’s exported goods are of everyday use and not sensitive to economic cycles. The slowdown of imports has been led by the drastic fall of raw material prices on the international market.
China’s textile and steel industries are both in difficult positions. Clothing exports during the first ten months of 2008 grew by only 2.8% over the same period last year, while October steel exports totaled 4.62 million tons, a drop of 31% from September.
China’s exports to ASEAN countries are growing significantly. Between January and October, they grew by 27.7% year on year. Exports to Indonesia, Vietnam, and Thailand all grew by about 40% year on year.
19% export growth is normal for China, meaning the processing trade has not seen a major decrease. China’s exports to emerging markets have offset to some degree the decline in exports to the US and European countries. And the decrease of overseas orders will not affect exports immediately, its influence to be seen in figures for November or later.
Exchange rate movement is also having its effect on China’s export industry. Calculating the exports of the last two Octobers with the exchange rate of these two months shows that exports in RMB this October grew by only 8% year on year.
The Moody’s report said China’s decision makers need to consider the influence of strong RMB on China’s export industry during the second half of the year. It is likely the RMB will stabilize and not appreciate sharply, a situation that may continue for quite a while.
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