China’s Foreign Trade Off 7.3% 1st 7 Months

China’s Foreign Trade Off 7.3% 1st 7 Months

China’s foreign trade dropped 7.3% Y-Y to CNY 13.63-T (US$2.23-T) in the 1st 7 months of Y 2015, official data showed Saturday.

Exports edged down by 0.9% from a year ago to CNY 7.75-T, imports fell by 14.6% to CNY 5.88-T, according to data from the General Administration of Customs (GAC).

The trade surplus doubled to hit CNY 1.87-T in the January-July frame

In July, foreign trade decreased by 8.8% from the same period last year to CNY 2.12-T, with exports declining by 8.9% to CNY 1.19-T and imports falling by 8.6% to CNY 930.2-B, data showed.

The trade surplus in July dropped by 10% to CNY 263-B.

Qu Hongbin, chief China economist at HSBC, attributed the slump in export growth mainly to sluggish external demand, especially exports to the EU and Japan.

Trade with the EU, China’s largest trade partner, slipped 7.6% Y-Y in the 1st 7 months to CNY 1.98-T, with exports dropping by 4.4% to CNY 1.22-T, and imports plunging by 12.4% to CNY 757.32-B.

Trade with fifth-largest partner Japan fell 11.1% to CNY 976.7-B, with exports and imports both dropping by 11.1% to CNY 471.06-B, and CNY 505.64-B respectively.

However, trade with the US and the ASEAN (Association of Southeast Asian Nations), China’s second- and 3rd-largest trade partners, managed to climb by 2.7%, and 1.3% to reach CNY 1.92-T,  and CNY 1.62-T respectively, driven by increased exports to those countries.

Exports of private firms increased by 4.6% Y-Y in the Jan.-July frame to CNY 3.46-T, while imports declined by 13.8% to CNY 1.47-T.

In contrast, state-owned enterprises saw their exports fall by 4.4% Y-Y to CNY 848.02-B, and imports dove by 17.6% to CNY 1.49-T.

Heavyweight provinces such as Guangdong and Jiangsu maintained relatively stable foreign trade performance, with Guangdong, the country’s largest province in terms of foreign trade volume, edging down 1.8% to CNY 3.39-T.

Foreign trade volume of Beijing and east China’s Shandong Province witnessed hefty Y-Y losses of 24% and 16.6% to CNY 1.15-T and CNY 829.55-B respectively, according to the GAC.

During the first seven months, China exported more electrical equipment and electronics while exporting fewer labor-intensive products such as clothing, textiles and shoes.

“Made-in-China products need to look for a new competitive edge in order to move up the value chain,” said Zhang Yansheng, an economist with the National Development and Reform Commission.

China’s exports are expected improve as the EU shows signs of growth and US employment and consumption get better, Zhang said.

Growth prospects of imports may remain bleak as commodity prices are likely to stay low on global markets in the third and fourth quarters, Zhang added.

Last month, China’s cabinet issued guidelines urging governments at all levels to implement measures to foster imports and exports, as the country strives to open its markets wider and upgrade its economy.

China will support imports by reducing tariffs on popular consumer goods, opening more duty-free shops at ports and expanding the variety of duty-free products, according to the State Council.

The guidelines also called on ministries including the GAC, the Ministry of Commerce and the State Administration of Foreign Exchange to facilitate foreign trade in FTZ (free trade zones) and offer tax refunds for exports.

By Song Miou

Paul Ebeling, Editor

HeffX-LTN

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