Exports still rising, but pace slows

By Diao Ying (China Daily)
Updated: 2008-11-12 06:36

Exports continue to rise although growth has slowed because of the global economic downturn, according to Customs figures released on Tuesday.

A worker fixes a damaged toy at the production line at an export-oriented toys factory in the suburbs of Shanghai October 31, 2008. [Agencies]

Exports reached $128.3 billion in October, up 19.2 percent year-on-year, but down from the 21.5 percent increase for September and the 22.3 percent rise for the first three quarters of the year.

Experts say the data show that the fundamentals of the export sector are still good, but estimate that growth may drop in the coming months as the financial crisis spreads to the wider economy, and from developed economies to emerging ones.

October data show that exports are "still quite healthy considering the macro economic environment," said Gene Ma, a macro economic analyst with China Economic Business Monitor.

Despite weak demand from developed countries, the US in particular, trade with emerging economies has increased rapidly, according to the statistics.

Exports to the US rose by only 11.4 percent last month, but exports to Brazil spiked over 86.8 percent, and India, 39.8 percent.

Exports of mechanical and electrical products amounted to $693 billion for the first 10 months, a robust increase of 23.2 percent.

But exports of traditional products like garments and accessories increased only 2.8 percent year on year.

Chen Deming, the commerce minister, said during the Canton Fair last month that exports were likely to maintain their momentum next year, but the rate of increase might slow.

However, "the outlook for next year's exports is not optimistic", said Shen Danyang, a trade expert with the Commerce Ministry.

The government has taken several measures to keep exports stable. It has increased export tax rebates for the industries most severely hit, including textiles, garments and toys.

The yuan's gains against the dollar have also halted since mid-July, helping make the prices of products less expensive and therefore more appealing to foreign consumers.

Import growth in October fell more sharply, as the prices of prime goods in the international market dropped and domestic demand started to weaken. Imports rose 15.6 percent to $93.1 billion in October, compared with September's 21.3 percent, widening the trade surplus to a record $35.2 billion.

The rise in the consumer price index (CPI) - the main gauge of inflation - also slowed for the sixth straight month in October, to 4 percent, providing the government more room to ease macroeconomic controls to stimulate the economy.

The CPI was 6.7 percent in the year to October, down from 7.0 percent in the first three quarters, the National Bureau of Statistics (NBS) announced on Tuesday.

The price of food, the main driver behind inflation since last year, climbed 8.5 percent last month from a year earlier, down from 9.7 percent in September.

Prices of non-food items rose 1.6 percent.