The heat of global financial meltdown, which discouraged consumer demand across the world, has failed to affect the Chinese export industry, leading to $215.99 Billion trade surplus during January-October 2008.
Chinese trade surplus for January-October 2008 was recorded at $215.99 Billion in which the month of October alone contributed nearly $35.24 Billion, said China’s General Administration of Customs, as reported by xinhuanet
The combined exports from China during January-October 2008 increased 21.9% to $1.2 Trillion from the same period previous year. Moreover, the country’s monthly surplus with the US and Europe surged annually 13.6% and 12.2% respectively. The gap between exports and imports was significantly high in October 2008, with exports recorded at $128.3 Billion and imports reaching $93.1 Billion. Amidst falling consumer demand in the domestic market, imports rose 12.4% to $93.1 Billion in October 2008 from 21.3% hike in previous month.
The main reason for the record increase in the Chinese trade surplus is increasing exports on account of strong demand for the Chinese goods in overseas market despite tough economic condition. The global financial meltdown has had almost no impact on Chinese goods’ demand as they mainly include daily used products which are immune to the economic cycle. Many superstores and distributors are still relying on the Chinese goods to meet daily used products demand; consequently, export is rising.
Another important reason for rise in the Chinese trade surplus is falling imports in the backdrop of weak consumer demand. Domestic consumption has plunged despite slowing inflation, leading to low domestic demand. Moreover, the export industry targets diverse markets that are helping the country to increase its export.
Initially, it was believed that the global recession would take its toll on the Chinese export industry, but economists have predicted that exports might not suffer much because of their competitiveness. However, some economists held different view, saying exporters have started feeling the pain, with demand from European countries falling sharply and some emerging economies witnessing slumping domestic demand.
According to a Research Analyst at RNCOS, “The rise in Chinese trade surplus for January-October 2008 indicates the resistance Chinese trade has shown against the global financial meltdown. Moreover, rising exports on account of strong demand in overseas market is a positive sign for the economy as it generates huge foreign exchange.”
