China to face weaker external demand

China is likely to grapple with weaker external demand during the rest of 2012 due to the slowing global economy, Shen Danyang, spokesman for the Ministry of Commerce, acknowledged on Wednesday.

“External demand in the next few months will be weaker than in the first half and the first eight months of the year,” Shen said at a regular press briefing.

China’s exports grew 2.7 percent year on year in August, up from 1 percent in the previous month but still below market expectations of 3 percent.

Shen blamed the low export growth on higher export costs, an unfavorable trading environment and waning external demand caused by the global economic downturn, especially the worsening debt crisis in the eurozone.

Amid a gloomy trade outlook, China introduced a raft of measures last week to stabilize export growth, including faster payment of export tax rebates and boosting loans to exporters.

China’s imports dropped for the third consecutive month, falling 2.6 percent from a year earlier to 151.31 billion U.S. dollars in August. The sharp slump showed that domestic demand had also weakened.

“The country’s demand for construction, mining and textile machinery contracted severely,” Shen said. “Lower global commodity prices also resulted in the fall in imports last month.”

Average import prices of rubber, iron ore and pulp fell 27.6 percent, 25.3 percent and 19.3 percent, respectively, in August.

The Chinese economy slowed to 7.6 percent in the second quarter of this year, marking the slowest pace of growth in more than three years, partly due to a cooling property market.

READ  China "still unsure" about creating financial mega-regulator

Xinhua

Leave a Reply