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Monday, 8 December 2008
First Export Drop in 7 Years Reported
The value of mainland exports fell year on year in November - the first monthly drop in more than seven years - an influential mainland newspaper has reported.
Natalie Chiu and Reuters in Beijing 7 December 2008
The value of mainland exports fell year on year in November - the first monthly drop in more than seven years - an influential mainland newspaper has reported.
Citing an unnamed “source close to the statistics”, the Guangzhou-based 21st Century Business Herald said customs authorities estimated exports in November were worth “over” US$100 billion and imports more than US$70 billion, and that both figures were down on those a year earlier. In November last year, exports were worth US$108 billion.
The Herald said the monthly fall in exports was the first since June 2001. It said top officials were alarmed by the sudden drop.
Customs authorities were now giving central policymakers estimates of trade flows daily instead of every 10 days, it said.
In October, the mainland exported goods worth US$128 billion, a rise of 19.2 per cent on the same month last year. Imports rose 15.6 per cent compared with a year earlier.
The reported numbers suggest the global economic chill has hit exporters faster and harder than many economists and officials expected.
The newspaper cautioned that the numbers it reported were “the product of a partial collation and may have omissions”. China Customs will issue official figures midweek.
Still, the Herald quoted the source as saying: “[We] estimated the growth rate would be much lower [than in October], but this negative growth was beyond our expectations.”
Analysts had expected China’s exports to be affected by the slowdown in the economies of its major trading partners, the United States and the European Union, but not for them to fall at this pace.
Beijing has been scrambling to help exporters. On November 1 it increased export tax rebates on a quarter of taxable goods. And there is speculation the central bank will slow the pace of the yuan’s rise against the US dollar, or even reverse it.
“The issue now is not whether to raise export tax rebates further or allow the yuan to depreciate further, it’s the shrinking demand that plays a determining role in global exports,” said Chris Leung, senior economist at DBS Bank. “Without any overseas orders, how can exporters benefit from the tax rebates?”
Qu Hongbin, chief China economist with HSBC, predicted exports would shrink for at least the next couple of months.
“Our important export markets have already slowed or even fallen into recession. Much deeper falls in exports will result.”
Zhang Yongjun, an economics researcher with top think-tank the State Information Centre, forecast exports would miss Beijing’s target of 20 per cent growth this year.
Zhou Shijian, a director of the China World Trade Organisation Research Society, told the Herald his forecast for export growth this year was below 15 per cent.
Mainland economic growth slowed sharply in the third quarter, and industrial production slumped to a seven-year low in October.
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First Export Drop in 7 Years Reported
Natalie Chiu and Reuters in Beijing
7 December 2008
The value of mainland exports fell year on year in November - the first monthly drop in more than seven years - an influential mainland newspaper has reported.
Citing an unnamed “source close to the statistics”, the Guangzhou-based 21st Century Business Herald said customs authorities estimated exports in November were worth “over” US$100 billion and imports more than US$70 billion, and that both figures were down on those a year earlier. In November last year, exports were worth US$108 billion.
The Herald said the monthly fall in exports was the first since June 2001. It said top officials were alarmed by the sudden drop.
Customs authorities were now giving central policymakers estimates of trade flows daily instead of every 10 days, it said.
In October, the mainland exported goods worth US$128 billion, a rise of 19.2 per cent on the same month last year. Imports rose 15.6 per cent compared with a year earlier.
The reported numbers suggest the global economic chill has hit exporters faster and harder than many economists and officials expected.
The newspaper cautioned that the numbers it reported were “the product of a partial collation and may have omissions”. China Customs will issue official figures midweek.
Still, the Herald quoted the source as saying: “[We] estimated the growth rate would be much lower [than in October], but this negative growth was beyond our expectations.”
Analysts had expected China’s exports to be affected by the slowdown in the economies of its major trading partners, the United States and the European Union, but not for them to fall at this pace.
Beijing has been scrambling to help exporters. On November 1 it increased export tax rebates on a quarter of taxable goods. And there is speculation the central bank will slow the pace of the yuan’s rise against the US dollar, or even reverse it.
“The issue now is not whether to raise export tax rebates further or allow the yuan to depreciate further, it’s the shrinking demand that plays a determining role in global exports,” said Chris Leung, senior economist at DBS Bank. “Without any overseas orders, how can exporters benefit from the tax rebates?”
Qu Hongbin, chief China economist with HSBC, predicted exports would shrink for at least the next couple of months.
“Our important export markets have already slowed or even fallen into recession. Much deeper falls in exports will result.”
Zhang Yongjun, an economics researcher with top think-tank the State Information Centre, forecast exports would miss Beijing’s target of 20 per cent growth this year.
Zhou Shijian, a director of the China World Trade Organisation Research Society, told the Herald his forecast for export growth this year was below 15 per cent.
Mainland economic growth slowed sharply in the third quarter, and industrial production slumped to a seven-year low in October.
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