Monday, July 9, 2012

China's trade growth weakens amid economic slump

(AP) ? China's June trade growth decelerated sharply in a new sign of a deepening slowdown in the world's second-largest economy.

Import growth fell by half from May's level to 6.3 percent, customs data showed Tuesday, reflecting weak consumer and industrial demand despite two interest rate cuts and other stimulus measures. Export growth declined to 11.3 percent from May's 15.3 percent amid European and U.S. economic weakness.

China's economic growth has fallen to its lowest level since the 2008 global crisis due to anemic demand for its exports and government controls imposed last year to cool overheating and inflation.

Premier Wen Jiabao warned last weekend the economy faces further pressure to slow, suggesting Beijing might be considering more stimulus. In addition to rate cuts, it has reduced state-set gasoline prices twice and is pumping money into the economy through higher spending on building low-cost housing, airports and other public works.

Economic growth fell to 8.1 percent in the first quarter and data due out later this week are expected to show it fell as low as 7.3 percent in the second quarter. Analysts expect a rebound later this year.

China's slowing demand for oil, iron ore and other foreign goods is bad news for other economies that had been looking to relatively strong Chinese growth to help drive demand for their exports.

The government has set an official target of increasing trade by 10 percent this year but private sector analysts say growth could be as low as zero.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2012-07-09-China-Trade/id-0ada3097d6fa449791216d009c6cd7d8

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