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Chinese trading experiencing reduced growth

July 10, 2013

Throughout much of the past decade, China has received a great deal of attention for the incredibly fast pace of its economic growth. However, some recent events have made it clear that the expansion is slowing down, particularly in the last several months. The July 10 release of the nation's import and export growth rates for June, both of which fell short of analysts' projections, served as the latest example of this. Given China's prominent place in the global economy, those deeply involved in it may be discussing these matters with foreign colleagues on phone calls made with international calling cards.

According to The New York Times, imports and exports both dropped on a year-over-year basis for June 2013. The former declined 0.7 percent as a result of lackluster demand, while the latter went down by 3.1 percent - based on both a drop in demand and a false export reporting scandal that caused the government to look hard at businesses in that sector. Both of these figures were well below estimates, with economists predicting respective increases of 8 percent and 4 percent in imports and exports.

Qu Hongbin and Sun Junwei, analysts with HSBC, told The Wall Street Journal that Chinese lawmakers may need to intervene to help address issues that led to the export.

"Policy response is crucial to avert a sharp deceleration of growth ... While a large-scale stimulus is off the table, Beijing policy makers signal that they will strike a balance between stabilizing growth and making structural adjustments," Hongbin and Junwei said.

Louis Kujis of Royal Bank of Scotland also told the Journal that exports were not likely to rebound in the immediate future, and that the sharp decline might force Chinese legislators to substantially rethink their prior economic attitudes due to their apparent unsustainable nature. 

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