With failed expectations, experts announced that there was a bit less buildup in the import of Chinese furniture and other products for the month of June which resulted to a three-year high in its trade surplus. This also adds distress on their government to support demand as the global economy decreases.
Based on to the customs bureau, the inbound shipments have escalated by 6.3% from a year earlier. Bloomberg News survey among 32 economists shows that the result of the early year report is lower than the 11% median estimate. Meanwhile, Chinaa??s export growth has slowed to 11.3% and its trade surplus rose to $31.7 billion.
As the data shows, it add to signs of declining momentum for global growth as Europe's debt crisis curbs exports and property controls to restrain domestic demand in the world's second-biggest economy. The rising surpluses may also further strain the trade relations with the US, which transcended the European Union during the first half as China's biggest foreign market.
"There's something bad for everyone in this. On the import side, the news is just bad, with evidence of weak investments spending, which reinforces hard-landing worries", Chief Asia economist at ING Financial Markets, Tim Condon stated.
Weaker Currency for this Year
Amid the reducing growth and Europe's turmoil, China has allowed its currency to deteriorate this year. Its national currency, Yuan, fell 0.88% from April through June. This is also the biggest quarterly decline since a dollar peg ended in 2005.
The Data Exceed the Estimates
But in May, they gain 15.3% upsurge in the exports compared to the Bloomberg survey which presents 10.6% meridian estimate. That's why economists reported that there was an upsurge of $24 billion median on its trade surplus.
There was also a shrinkage that took place for the first time since January with the gauge of exports orders in China's official purchasing managers' index for June. That's why, experts suggests that shipments overseas will gradual down in the future.
Downward Difficulty on the Economy
Based on the statement of Premier Wen Jiabao in Xinhua News Agency last July 8, the authorities will intensify the fine-tuning of policies as downward issue on the economy remains relatively large. With this, the government will promote steady growth in overseas sales. Wen also urged the Chinese exporters to explore the markets throughout Asia and diversify the trading partners in the face of developing protectionism.
By looking at the latest figures, the government might miss its goal of 10% growth in trade this year. In the first half, imports gained 6.7% while exports rose by 9.2%.
