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BEIJING: China’s trade surplus fell nearly 12 percent in the first
half of 2008, official data showed Thursday, as a slowing global
economy, rising yuan and the impacts of a devastating earthquake hit
exporters.
The surplus for the first six months of the year
came in at $99.04 billion, the Customs bureau said, with strong
domestic consumption also helping to boost imports and ease the
trade imbalance.
The surplus in June alone fell 20.7 percent to
$21.35 billion, while the six-monthly fall in the surplus was just
over 11.8 percent.
Analysts said the global economic slowdown,
the appreciation of the Chinese currency, the yuan, and rising
production costs were the fundamental factors acting as a drag on
the Chinese export machine.
“Currency appreciation, rising costs of labor,
raw materials, land and environmental protection, and the removal of
favorable policies toward exports have all been eroding the
competitiveness of Chinese exporters,” said Lehman Brothers’
Hong Kong-based economist Sun Mingchun.
“On top of all these, the unfolding global
economic slowdown is adding more salt to the wound.”
Total trade in the first half of this year was
$1.23 trillion, up 25.7 percent from the same period last year.
Imports from January to June grew 30.6 percent
to $567.57 billion, the bureau said on its website. Exports rose by
21.9 percent year on year to $666.61 billion.
Sherman Chan, an economist at Moody’s
Economy.com, said the 8-magnitude earthquake in Sichuan province on
May 12, which left nearly 88,000 people dead or missing, also had an
impact on exports.
“The earthquake in May . . . disrupted
economic activity across the country,” Chan said.
“Resources have been relocated to emergency
relief and production became more domestic-oriented as demand for
aid materials surged. The switch in focus to the domestic sector was
in part responsible for the slowdown in exports.”
The Chinese government said last month the
nation’s trade surplus was likely to shrink in 2008 for the first
time in five years on weakening exports.
Beijing has allowed the yuan to rise steadily
from 8.3 to the dollar about three years ago when it loosened the
peg to the greenback to roughly 6.85 now, placing huge pressure on
Chinese exporters and making imports cheaper.
The currency has appreciated by more than 6
percent this year, but the United States still believes this is not
fast enough, accusing China of keeping the yuan artificially weak to
boost its exports.
China has also cut the export tax rebate and
removed some import tariffs in a bid to narrow the trade surplus.
But with many exporters being forced out of
business or facing shrinking profits, some analysts said the
government may have to backtrack on some of its measures to curb
exports.
In fact, the Beijing News reported Thursday that
China would probably announce this month a 2-percent increase in the
export tax rebate of textile products.
“The worries over the export sector get worse
and political pressure for loosening [of policies to curb export
growth] rises,” said Stephen Green, a Shanghai-based analyst with
Standard Chartered, in a research report.
Export growth is likely to continue its
weakening trend this year because of the sluggish growth prospect of
developed economies, according to Green.
However, even a fall of more than 10 percent
would still keep the surplus at near record levels.
The trade surplus last year reached $262.2
billion, a surge of nearly 50 percent from 2006 and a ten-fold rise
from 2003.
-- AFP
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