My comment: Despite we see positive signs in the long term for China´s economy (12-18 months and beyond), We are having hard times in the short term in the export side.
The goal is not to reduce exports but to increase imports in order to push domestic demand and help friendly economies.. The higher risk for other economies that want to take advantage of China´s growth is to fall into the protectionist hook and therefore into a trade war with daily batlles at the World Trade Organization. Of course, China cannot do anything but to advise others and as it did, to stay away of that policies. Peace and best wishes. Xi http://www.bloomberg.com/apps/news?pid=20601087&sid=axZwl6OyPaZY&refer=home Feb. 11 (Bloomberg) -- China’s exports fell by the most in almost 13 years as demand dried up in the U.S. and Europe, worsening the outlook for jobs and industrial production in the world’s third-biggest economy. Shipments declined 17.5 percent in January from a year earlier, the customs bureau said on its Web site today, after falling 2.8 percent in December. The latest number was worse than the 14 percent decline forecast in a Bloomberg News survey of 14 economists. China’s economic slide has already cost the jobs of 20 million migrant workers, adding pressure on the government to boost consumption and expand a 4 trillion yuan ($585 billion) stimulus package. Government researchers have advocated weakening the yuan against the dollar to support exports, a move that could add to trade tensions amid the worst financial crisis since World War II. “All China’s major trading partners are in recession,” said Dariusz Kowalczyk, chief investment strategist at SJS Markets Ltd. in Hong Kong. “Boosting domestic demand is extremely important.” Imports declined 43.1 percent in January from a year earlier, the biggest decline since Bloomberg data began in 1995, on the nation’s waning demand for raw materials for manufacturing and lower commodity prices. The trade surplus was $39.11 billion, the second-highest on record. Central bank Governor Zhou Xiaochuan said yesterday that the nation needed to cut its savings rate to boost consumption and sustain growth. ‘Guiding’ China’s Currency China’s expansion may slump to 3 percent this quarter from a year earlier, the worst performance in at least 15 years, Kowalczyk said. The government may expand a program of subsidies for home-appliance purchases, keep cutting interest rates and bank reserve requirements and let the yuan fall to 7 against the dollar this year, he said. China should “actively guide” the yuan to about 6.93 against the dollar to aid growth and bolster employment, according to a report by the Ministry of Finance’s research institute published Feb. 7. The Chinese currency rose to 6.8339 per dollar as of 12:13 p.m. in Shanghai today from 6.8342 before the data was released. U.S. Treasury Secretary Timothy Geithner said yesterday that the new administration is yet to decide whether China is manipulating its currency. He added that China was an important force for global economic stability and “it is in the interests of the United States to work closely with them.” Toy Factories Close The trade slump was likely exacerbated by a week-long Lunar New Year holiday, which occurred in January this year and February last year. Mattel Inc., the world’s biggest toymaker, said this month that fourth- quarter profit plunged as consumers cut spending on Barbie dolls and Hot Wheels cars during the worst U.S. holiday- shopping season in 40 years. Mattel imports from China, where more than 4,000 toy companies closed last year as demand fell and countries tightened safety standards, according to the official Xinhua News Agency. China’s industrial output grew 5.7 percent in December, down from 17.4 percent a year earlier. The nation’s waning demand for raw materials and parts to manufacture exports is dragging down economies across Asia. Taiwan’s shipments to the mainland slumped 64 percent in January because of weaker demand for electronic components. Philippine shipments to China fell 58 percent. Trade Tensions Rising protectionism may make it “even more difficult for China to have an export recovery any time soon,” according to Isaac Meng, a senior economist at BNP Paribas SA in Beijing. He cited “Buy American” provisions in a U.S. economic stimulus package, watered down after warnings from President Barack Obama and foreign leaders that they risked triggering a trade war. India imposed a six-month ban on imports of Chinese toys last month, citing health concerns. China said Feb. 9 that India’s trade barriers may have “a serious impact on bilateral trade relations.” China’s economy grew 6.8 percent from a year earlier in the fourth quarter, the slowest pace in seven years, after gaining 9 percent in the previous three months. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
