Page last updated at 10:49 GMT, Tuesday, 11 November 2008

Chinese trade surplus hits record

Chinese money
There have been fears a Chinese slowdown would harm global growth

China's trade surplus rose to $35.2bn (22.48bn) in October, hitting a record for a third month in a row, data shows.

The surplus, the difference between the value of exports and imports, rose 20% from September's $29.36bn high.

Despite the rise, there were signs that foreign demand for Chinese goods was beginning to slow amid the downturn.

Separate data showed inflation fell to a 17-month low, increasing the chance of further interest rate cuts as China acts to boost its economy.

China has set out a $586bn economic stimulus plan to counter slower foreign demand by boosting domestic spending.

The plan, announced on Sunday, is aimed at increasing domestic growth by cutting taxes and investing in infrastructure projects.

While the trade surplus hit a record last month, the figures showed that overseas appetite for Chinese goods was cooling with exports up 19.1% compared to a year earlier, falling from September's 21.5% growth.

Imports rose 12.4% to $93.1bn compared with September's 21.3% growth rate, as demand at home cooled.

China's monthly surplus with the US increased 13.6% year-on-year while its surplus with with Europe climbed 12.2%, according to the national customs agency.

Necessities

There have been fears that if China's economy slows, it will have significant repercussions globally.

Recent figures showed China's growth reached at annualised rate of 9% in the third quarter - though considerable it marks a slowdown from 10.1% growth in the previous quarter.

"The global financial crisis has had a considerable impact on Chinas export growth, which will continue to show weakness with recession in the US and Europe," said a report by Jing Ulrich, JP Morgan's chairwoman for China equities.

China's central bank expects growth to slow to between 8% and 9% in 2009.

But Zhou Xi, an analyst with Bohai Securities remained positive: "A lot of Chinese exports are daily necessities and are not sensitive to the economic cycle."

"Many overseas distributors and superstores are still buying in China"

Interest rates

Last month the consumer price index was at its lowest level since May 2007, figures from the National Bureau of Statistics showed.

In October prices were up 4% from a year earlier, compared with 4.6% in September.

"Now the government can be more proactive about keeping up growth without having to worry about curbing price increases," said Zhang Xinfa, an economist with Galaxy Securities.

Moody's economist Sherman Chan echoed this saying: "Slowing inflation gives the People's Bank of China the green light to cut interest rates in coming months, helping to shore up the cooling economy."

Print Sponsor


SEE ALSO
Stocks surge after China stimulus
10 Nov 08 |  Business
China cuts interest rates again
29 Oct 08 |  Business
Chinese trade surplus at new high
10 Sep 08 |  Business
China bank sees top 2008 profits
21 Aug 08 |  Business
China inflation down from highs
12 Jun 08 |  Business
Oil costs hit China trade surplus
11 Jun 08 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC iD

Sign in

BBC navigation

Copyright © 2020 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific