Trade surplus of China rose to a new level in September on account of excessive slowdown in the imports caused by falling commodity prices and lower shipment rates.
According to the government of China, trade surplus of China struck a new monthly height of $29.3 Billion in September 2008, as reported by Forbes.
China has so far exhibited balanced trade in the current year. However, the trade surplus for January-September 2008 actually contracted by 2.6% ($4.92 Billion), as compared to the same period in 2007. China’s exports amounted to $136.4 Billion in September 2008, recording a 21.5% increment over September 2007. On the other hand, imports increased 21.3% to reach $107.1 Billion.
Furthermore, exports from China rose 22.3%, amounting US$ 1.07 Trillion in January-September 2008 while the imports elevated 29% to reach US$ 893.1 Billion during the same period. Chinese exports witnessed a growth of 0.4% during January-June 2008, but were 4.8% less than the growth over the same period in 2007.
The increase in trade surplus of China is chiefly because the imports slowed down more rapidly as compared to exports. Slumping costs of commodities and lower rates of shipping has contributed significantly to cut the inward shipments value and consequently, import bill reduced, causing the trade surplus to increase.
It is noteworthy that the US and EU are raising demands for China to loosen its currency controls and remove trade barriers.
It is estimated that the growth of exports in China would face a slowdown as economic volatility is spreading from markets of developed nations to the emerging markets. Additionally, weakening global demand and increasing costs in China would also affect the export and thus, the income from trade would get affected. Orders from the US are likely to remain feeble as credit crisis would turn grimmer.
According to a Research Analyst at RNCOS, “The increase in China’s export has facilitated the growth of Chinese trade surplus. However, the export industry is not expected to display such a trend in coming times as the current global financial crunch is likely to grip over the Chinese export industry. Resultantly, China will earn reduced income from trade in coming months that will further impact its economy."
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