The message from China’s trade data for the month of June and the six months to June 30 have one overwhelming message – an economy stumbling along in low gear.
China’s total trade has slumped in the first half of this year, with two-way trade for the six months to June 30 falling nearly 7% of the year fell 6.9% to 11.53 trillion yuan ($A2.49 trillion), according to figures from the country’s National Statistics Bureau yesterday.
Monday’s report was far below Beijing’s official target for the year of “about” 6% and the performance for the full year won’t come anywhere near that forecast.
The ‘about’ 6% target is a reduction from the 7.5% goal set for 2014 – when trade grew by just 3.4%.
But while the sluggish Chinese economy is mostly to blame for the weak trade performance, a major influence has been the slide in commodity prices in the past six months – especially coal, iron ore, oil and copper.
That’s a point readily accepted by the government: “Commodity prices fell significantly, dragging down growth in import value,” Chinese customs spokesman Huang Songping told media at yesterday’s post release briefing in Beijing.
“Export costs remained high, undermining export competitiveness,” he said, adding the yuan had strengthened against the dollar, euro and yen since the start of the year (but it has fallen in the past month as the Chinese share market rout unfolded).
“The downward pressures on the domestic economy increased and the demand for imports was weak,” AFP and Reuters reported the spokesman as saying.
For June, China’s imports fell for the eighth consecutive month, down 6.7% year-on-year to 890.67 billion yuan ($A192.60 billion). But that was a lot better than the near 18% slide recorded in May.
Exports rose 2.1% to 1.17 trillion yuan ($A252.51 billion) year-on-year – ending three monthly declines in a row – and the country’s trade surplus leaped 45% to 284.2 billion yuan ($A61.33 billion or $US46.1 billion). That took the first half surplus to $US263.2 billion ($A355 billion). Exports fell 2.5% in May.
China’s gross domestic product (GDP) data for the June quarter and June six months will be released tomorrow and the trade figures suggest that it will be just under 7% (which is the official target for this year).
