China Export Growth May Cool on Global Economic Slump
China’s exports probably grew at the slowest pace since March 2007 as demand slumped because of the global financial crisis and shippers struggled to get letters of credit.
Shipments climbed 18.1 percent in October from a year earlier after gaining 21.5 percent in September, according to the median estimate of 17 economists surveyed by Bloomberg News. The data may be released as early as today.
The world’s fourth-biggest economy risks expanding at the weakest pace in 18 years in 2009 as exports cool and the property market slumps, economists say. The government pledged yesterday a 4 trillion yuan ($586 billion) stimulus plan to prop up growth through 2010.
“Exports are deteriorating fast and orders may continue to shrink on faltering overseas demand,” said Xing Ziqiang, an economist at China International Capital Corp. in Beijing. “Soon that will translate into the loss of jobs, an issue that would worry the government more,” Xing said.
The trade surplus may have swelled to a record $30 billion on weaker imports. Inflation probably slowed for the sixth straight month to 4.1 percent, the survey showed.
The global economic slowdown and frozen credit markets have made it more difficult for shippers to secure letters of credit, which transfer payments internationally from buyer to seller once shipments have been deliver.
No Money to Pay
“We dare not sign any big orders nowadays, for fear that buyers may not have the money to pay in the end,” Wu Yipeng, vice manger of Shantou Defeng Trading Co., a toy exporter in southern Guangdong province, said by telephone. “Things could get worse next year.”
China’s economy grew 9 percent in the third quarter, the slowest pace in five years. Next year’s expansion may be 7.5 percent or less, the weakest since 1990, according to Credit Suisse AG and UBS AG.
Tags: economic, export, investmentPages: 1 2
