Int’l demand may decrease as global economy slows
China’s Ministry of Commerce (MOC) warned in its latest economic outlook of a possible slide in international demand with an anticipated global slowdown led by the U.S. economy.
According to the report, the world economy would slow due to the dimming outlook for the U.S economy, which would cause a sharp decline in China’s exports since China’s economic growth would be tied to international demand in the next stage. As a result, the government should develop flexible macroeconomic policies to respond to the uncertainty of global trends.
The U.S demand would fall if the U.S economy weakened. According to the ministry statistics, the U.S remained China’s second largest export destination. In the first quarter of 2007, China’s exports to the U.S. increased by 20.4% from a year ago. However the export growth slowed to 15.6% in the second quarter and even further to 12.4% in the third quarter.
According to China’s central bank, if the U.S economic growth slows by 1%, China’s export will decline by 6%. Exports to the U.S accounted for 19.4% of China’s total in the first nine months of 2007.
Tags: central-bank, export