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West slowdown hits China trade
10 Jul 2008The pace of China's booming exports slowed dramatically in June as Western customers reined in their orders.
Demand from Europe and the US have slowed as their economies weaken, while high inflation in China has meant it is no longer as cheap to produce goods there as in previous years.
While the annual pace of China's exports remains strong, at 17.6% in June, it is falling rapidly. May's year-on-year growth was more than 28%. Today's June number fell well short of the expected 22% growth.
China is caught between competing pressures. It has raised the value of its currency, the yuan, to curb rampant inflation, but this has put added burdens on exporters already squeezed by raw material and labour costs and taxes.
In the first six months, exports grew 21.9% and imports rose 30.6% from a year earlier. The first-half trade surplus fell 11.8% to $99 billion (£50.04 billion) from a year earlier.
