Declining trade in June frames China slowdownChina’s exports and imports both unexpectedly declined in June in a sign that weakness in global and domestic demand will intensify the slowdown in the world’s second-biggest economy.
Overseas shipments fell 3.1 percent from a year earlier, the General Administration of Customs said in Beijing yesterday. Imports declined 0.7 percent after a 0.3 percent drop in May.
The report follows May’s collapse in export gains after a crackdown on fake invoices that inflated data in the first four months of the year. Trade growth below the government’s target of eight percent for the year and a cash crunch that sent interbank borrowing costs to records last month will test Premier Li Keqiang’s tolerance of a slowdown that may leave expansion below the government’s annual goal.
“The story of China’s economic growth this year has changed -- it’s no longer a story about modest recovery, but about where the government’s bottom line is,” said Xu Gao, Beijing-based chief economist with Everbright Securities, who previously worked for the World Bank. “Without government support, China’s growth will continue to slide.”
The nation’s money market cash squeeze is likely to reduce credit growth this year by 750 billion yuan ($122 billion), or an amount equivalent to the size of Vietnam’s economy, based on the median estimate in a survey of analysts.
China Rongsheng Heavy Industries Group Holdings, the nation’s biggest shipyard outside state control, said earlier this month that it had sought government financial support as orders plunged, two days after it said that some idled contract workers had surrounded the entrance of its main factory in Jiangsu province.
The order book at Chinese shipbuilders fell 23 percent at the end of May from a year earlier, according to the China Association of National Shipbuilding Industry.
China’s economic expansion probably slowed for a second quarter in the three months that ended June 30. Gross domestic product rose 7.5 percent from a year earlier, according to the median of 34 economist estimates ahead of data due Monday. That’s down from 7.7 percent in the first quarter and 7.9 percent in the last three months of 2012.
The central bank will publish data on credit and money supply over the next week. The statistics bureau on July 15 will also provide June numbers on industrial production and retail sales along with first-half fixed-asset investment.
China’s consumer price index rose 2.7 percent in June from a year earlier, the National Bureau of Statistics said yesterday in Beijing, compared with a median estimate of 2.5 percent in a Bloomberg News survey and a 2.1 percent gain in May. Producer prices fell 2.7 percent.
More in Industry
DSME fined ￦15.3 billion for mistreating subcontractors
Hyundai, Naver to work together on connected car systems
SK Telcom merges two security services subsidiaries
KDB requests sit-down with Asiana unions about takeover
Are you Taycan to me?