China Faces Smaller Trade Surplus for The Third Month In A Row

October 14 00:00 2011

New York, October 14 ( – The Chinese trade surplus has reduced from the erstwhile $17.8 billion in August. It has taken close to 50% fall if compared with July 2011’s figures of 31.5 billion. China’s exports rose at 17.1% while imports grew at close to 20%. The growth in second quarter GDP has been 9.5% as compared to 10% that has been the case for China for a long time.

All these are being perceived as indicators of the falling rate of growth of the Chinese economy pointing towards a halt in the China story. The Chinese economy has been known world over for its favorable balance of trade. The country’s economy has been largely export driven and this has resulted in a trade surplus for many years. However the recent economic turmoil in Europe has hit the country hard. More than half of China’s exports to Europe have been cut down. This is the major cause of the present Chinese woes.

To add to this is the fact that the Renminbi is fast appreciating against the dollar. The Chinese government had kept it undervalued for a long time. However, of late pressures from American counterparts have prompted the Chinese government to temporarily take a hands off approach.