China’s Exports Recovery May Be a Myth

China’s exports are likely to grow in the fourth quarter of this year, according to a recent forecast published by some Chinese and foreign institutions. However, at Trading Economics we don't buy it. It’s either a matter of miracle or bad accounting techniques.

Indeed, exports, which have been the main driver of the Chinese economy in the past decade, fell for the ninth straight month in July as the global recession is still cutting international demand. In fact, overseas sales slid 23% in July from a year earlier, 21.4 % in June and a record 26.4% in May. Moreover, China will need to wait a long time for any improvement in its top two overseas markets since unemployment rates are still rising in Europe and in the United States.

In addition, some Chinese economists have been saying that the exports driven sector of the Chinese economy may recover due to a massive stimulus package. But how is that possible if the government money has been mostly designated to support construction activity rather than provide help to distressed exporters or households.

Anna Fedec,
8/12/2009 7:05:16 PM