hurricanemaxi
Joined: 10 Aug 2011
Posts: 120
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 Posted: Tue Jan 10, 2012 6:51 am Post subject: China Import Growth Slide Deepens Global Risks |
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China’s import growth fell to a two- year low in December, underscoring a slowdown in the fastest- growing major economy that deepens risks for the global outlook.
Imports (CNFRIMPY) rose 11.8 percent from a year before, less than all 21 estimates in a Bloomberg News survey of economists, a government report showed today in Beijing. The moderation caused the trade surplus to increase to $16.5 billion in the month, as exports advanced 13.4 percent in December.
Signs of domestic demand moderation bolstered forecasts for monetary easing -- spurring a gain in local stocks -- as Europe veers toward a recession and the International Monetary Fund prepares a “substantial” cut to its global growth forecast. The widening surplus may give U.S. Treasury Secretary Timothy F. Geithner ammunition to renew pressure for a stronger yuan on a visit to Beijing today.
“China will be asked to step up and shoulder more responsibility, together with the U.S., to ensure the world does not fall into a recession again,” said Liu Li-Gang, an economist in Hong Kong at Australia & New Zealand Banking Group Ltd. who previously worked at the World Bank. “If the yuan were to depreciate this year, China’s exchange-rate policy will be accused of a ‘beggar thy neighbor policy.’”
The Shanghai Composite Index (SHCOMP) of stocks climbed 2.2 percent as of 1:44 p.m. local time, rising on speculation the central bank may add to last month’s cut in banks’ reserve requirement ratio. Qu Hongbin, HSBC Holdings Plc’s chief China economist, today predicted three reductions in the next six months.
Yuan Policy
The yuan was little changed at 6.3127 per dollar today. It has appreciated about 8 percent since Premier Wen Jiabao allowed greater fluctuation in June 2010 as the global recovery strengthened. The U.S. Treasury Department said last month the yuan is substantially undervalued and the U.S. will “press for policy changes that yield greater exchange-rate flexibility.” Geithner starts a two-day visit to Beijing today.
Slower import growth in China is bad news for Australia, which counts on the nation as its biggest export destination and last week reported that its trade surplus unexpectedly narrowed as shipments of resources slowed. The Philippines today said its exports slid 19.4 percent in November from a year earlier.
The euro region’s danger of a recession may be reinforced by a report today showing industrial production in France fell 0.2 percent in November from a month earlier, according to the median estimate of 14 economists surveyed by Bloomberg News.
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