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Exports decline for ninth month on weak global demand
Published on: 2009-08-11
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Aug. 11 (Bloomberg) -- China’s exports fell for a ninth month on weak global demand, reinforcing the government’s case for sticking with a “moderately loose” monetary policy to fuel domestic growth.
Overseas sales dropped 23 percent in July from a year earlier, the customs bureau said today on its Web site. That matched the median estimate in a Bloomberg News survey of 23 economists. Exports fell 21.4 percent in June.
Premier Wen Jiabao reiterated on Aug. 9 that monetary policy and a “proactive” fiscal stance will remain unchanged because of problems including sliding export demand and industrial overcapacity. China, the world’s second-biggest exporter, has stalled gains by the yuan against the dollar, increased tax rebates and boosted trade finance to aid exporters.
China’s exports and imports may “further stabilize and start to recover in the coming months as the extreme uncertainties that froze orders earlier on fade,” said Wang Tao, an economist at UBS AG in Beijing. “Towards the end of 2009, we expect exports to recover on rebounding consumer demand, even though from a lower level.”
In South Korea, where overseas shipments have dropped for nine straight months, the government expects exports to start rising from October. Samsung Electronics Co., Hyundai Motor Co. and LG Electronics Inc. are among exporters that reported increased profits last quarter.
Imports dropped 14.9 percent from a year earlier after a 13.2 percent fall in June. The economists’ median estimate was for a 15 percent decline.
The numbers released today indicated that the trade surplus widened to $10.6 billion. In June, the gap was $8.25 billion, the smallest in two years excluding seasonal distortions.
China’s gross domestic product grew 7.9 percent in the second quarter after a 4 trillion yuan ($585 billion) stimulus package spurred lending and boosted consumption and investment.
Goldman Sachs Group Inc. yesterday raised its forecast for China’s economic growth this year to 9.4 percent, citing “strong momentum” and the likelihood that the government will delay tightening policy.
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