Trade data from China for September, released by the customs office, showed that the country’s booming pace of export growth has begun to ease as the global upheaval and a gradual rise in the value of the renminbi are taking their toll.
Both exports and imports still rose solidly last month — up 17.1 percent and 20.9 percent, respectively, compared to a year earlier, showing that global trade has by no means collapsed.
China’s trade surplus narrowed to $14.5 billion in September, from $17.8 billion in August. But the slimmer surplus was unlikely to fully defuse criticism from U.S. lawmakers who argue that Beijing is keeping the renminbi unfairly low against the U.S. dollar.
On Tuesday, the U.S. Senate passed a bill that would impose tariffs on certain Chinese goods if the Treasury Department determined that China was undervaluing its currency to its advantage.
“We think the probability of this currency bill being turned into a law remains very low, given the public opposition already voiced by the U.S. president and leading House Republicans,” said Yao Wei, an economist at Société Générale in Hong Kong, in a research note. “However, this standoff is likely to continue distorting the short-term path of the yuan, as China does not appreciate the U.S.’s attempts to bully it.”
Beijing has allowed a gradual appreciation in the renminbi since mid-2010. But the authorities are resisting calls for a faster rise in the currency, in part because they resent the pressure from the United States and in part because they fear that this would hurt Chinese exporters.
Lu Peijun, the deputy head of the Chinese customs administration, underlined that point on Thursday: “The rise in renminbi exchange rate may limit the room for export growth,” he said, according to Reuters.
Although the Chinese economy is growing less rapidly, many economists believe that China is headed for a gradual slowdown, rather than a sharp, shocking halt.
Still, the September trade figures were below what economists had been expecting and represented a marked slowdown from August, when exports rose 24.5 percent and imports by 30.2 percent.
As such, they highlighted that the upheaval generated by the debt crisis in Europe, and by the feeble nature of the U.S. economy, is denting trade activity around the globe.
“Although Chinese exports remain close to record levels, some impact from weaker global growth was to be expected, and the fall in year-on-year growth in September suggests this is starting to happen,” Brian Jackson, an emerging markets strategist at the Royal Bank of Canada in Hong Kong, commented in a note to clients.
This partly reflects not only slower growth in major trading partners but also a recent loss of competitiveness for Chinese exporters as a result of currency moves, he added.
“We don’t expect China’s exports to collapse as sharply as they did at the end of 2008, but risks are definitely skewed to a further moderation in external demand in coming months,” Mr. Jackson said.
The International Monetary Fund, meanwhile, on Thursday echoed the general sense of worry about the global outlook, tempered with a degree of confidence about Asian domestic demand, which is helping to cushion the region from the global upheaval.
“Domestic demand is still resilient, and it should continue to sustain activity across the region,” the I.M.F. said in its regional economic outlook for the Asia-Pacific region.
The fund forecast relatively robust growth of 6.3 percent for the region this year and 6.7 percent in 2012 on average, slightly below a previous forecast of 6.8 percent for 2011 and 6.9 percent for 2012 made in April.
Nevertheless, it stressed that an escalation of the financial turbulence in the euro zone and a more severe slowdown in the United States would have “clear macroeconomic and financial spillovers to Asia.”
“Asia has clearly not ‘decoupled’ from advanced economies,” the I.M.F. said.
Article source: http://www.nytimes.com/2011/10/14/business/global/china-exports-trade-surplus.html?partner=rss&emc=rss
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