CHINA-ECONOMY/TRADE China releases forecast-beating June trade data, though problems remain

Record ID: 147265

  • Title: CHINA-ECONOMY/TRADE China releases forecast-beating June trade data, though problems remain
  • Date: 13th July 2015
  • Summary: BEIJING, CHINA (JULY 13, 2015) (REUTERS) GENERAL ADMINISTRATION OF CUSTOMS SPOKESMAN, HUANG SONGPING (R), AND STATE COUNCIL INFORMATION OFFICE SPOKESMAN, HU KAIHONG (L), SITTING DOWN FOR NEWS CONFERENCE JOURNALISTS SITTING (SOUNDBITE) (Mandarin) GENERAL ADMINISTRATION OF CUSTOMS SPOKESMAN, HUANG SONGPING, SAYING: "Since the beginning of this year, the national economy has
  • Embargoed: 28th July 2015 13:00
  • Keywords:
  • Location: China
  • Country: China
  • Topics: General
  • Reuters ID: LVA2V2TDZZGBSXSGUYUHL8QH8UNH
  • Aspect Ratio: 16:9
  • Story Text: China's export sales unexpectedly rose for the first time in four months in June and imports fell again, new data showed on Monday (July 13), but imports still posted their best performance this year, causing some optimism tepid trade flows are picking up.
    Yet hopes were offset by a realisation that China's trade sector had a poor second quarter, with volumes contracting significantly from a year ago, further dragging on an already stuttering Chinese economy.
    The General Administration of Customs said Chinese exports grew 2.8 percent last month from a year ago, beating forecasts for a 0.2 percent decline.
    Imports fell for an eighth consecutive month, on a yearly basis, but the 6.1 percent drop was the smallest this year, and much better than the 15.0 decline expected by economists.
    Huang Songping, spokesman for the customs office, said that despite the relatively positive June data, fundamental weaknesses in the economy remained.
    "Since the beginning of this year, the national economy has overall been running within a reasonable sphere, but (we) must see that due to the influence of cyclical factors and restraints caused by structural problems, the downward pressure on the economy is still rather large, the economy's development has entered a new normal. Even though in the long-run (the trend of) economic improvement basically hasn't changed, at present China's industrial overcapacity issues are still quite pronounced, which is suppressing import demand," he said.
    Rising labour costs, along with weak global demand and a strong Yuan were all proving long-term drags on the economy.
    "The competitiveness of (Chinese) exports have weakened, At present China's exports, especially of labour-intensive products, have proved quite sensitive to changes in overall (production) costs. During our organisation's survey, some labour-intensive enterprises expressed (to us) that the increase in the cost of labour is the main reason for the weakening in their competitive advantage," said Huang.
    With China set to publish its second-quarter gross domestic product (GDP) data on Wednesday (June 15), some analysts warned that lacklustre trade is the precursor for disappointing economic growth.
    Given the headwinds faced by China's economy, analysts polled by Reuters predict growth may have dipped to 6.9 percent between April and June, the weakest performance since the global financial crisis.
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