Chinese Exports Fall Sharply

Chinese exports fell steeply year-on-year in April, raising fears that the worst is not yet over for an economy that has shown signs of bottoming out in recent weeks., Financial Times 5/12/2009 8:36:16 AM

The total value of Chinese exports fell 22.6 per cent from a year earlier in April to $91.9bn, a faster rate of decline than the 17.1 per cent year-on-year drop in March, which many analysts and officials took as a sign that external demand for Chinese goods was starting to recover.

Imports fell 23 per cent in April from a year earlier to $78.8bn in what some analysts said was a sign that domestic investors were still unwilling to invest in new capacity.

On a more positive note, the government said on Tuesday that fixed-asset investment in Chinese urban areas rose faster than expected in the first four months, jumping 30.5 per cent from a year earlier.

State-backed infrastructure projects intended to boost flagging growth appeared to account for the majority of the investment, but an apparent bottoming out in house prices may have contributed to a resumption of real estate development.

Chinese urban property prices fell 1.1 per cent in April from a year earlier, compared with a fall of 1.3 per cent in March but on a monthly basis prices rose 0.4 per cent in April, compared with a monthly rise of 0.2 per cent in March.

In the last decade, China’s rapid growth has relied heavily on fixed asset investment – primarily in factories that make cheap goods for export and in real estate to house the increasingly affluent masses.

A collapse in both exports and real estate has cut year-on-year GDP growth in the country from 13 per cent in 2007 to 6.1 per cent in the first quarter of this year and prompted the government to launch a series of economic stimulus measures.

Chinese Exports Fall Sharply