Wednesday 11 November 2015

Chinese trade disappoints in October indicating economic slowdown


Beijing - While Beijing has repeatedly cut interest rates, the latest data showing an eighth monthly drop in net trade indicates persistent weakness in demand at home and abroad.

October exports fell 6.9 per cent from a year ago, down for a fourth month, while imports slipped 18.8 per cent, leaving the country with a record high trade surplus of $61.64 billion, the General Administration of Customs said.

The decline in October exports was led by trade with developed economies, according to customs data. Shipments to the United States dipped 0.9 per cent on the year. Exports to the European Union dropped 2.9 per cent and exports to Japan fell 7.7 per cent.

Combined exports and imports are down 8.5 per cent for the first 10 months of the year, well below the full-year official target for growth of 6 per cent. Last week, the Ministry of Commerce said the value of China's exports this year was likely to stay similar to 2014 levels, while imports could drop sharply in the fourth quarter.

In fact, Beijing wants to move away from its dependence on low-end export manufacturing to drive growth and move up the value chain into high-tech products and services. China's trade weighted exchange rate was still 8.5 per cent stronger than it was a year ago in September, and by itself this is hurting exporters, although weak global trade growth is a bigger problem. The country's economic growth dipped to 6.9 per cent in the third quarter, dropping below the 7 per cent mark for the first time since the global financial crisis.


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