Chinese exports surge in reaction to bank policy

The Times(UK) ^ | 03/10/10 | Leo Lewis

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March 10, 2010

Chinese exports surge in reaction to bank policy

Leo Lewis, Asia Business Correspondent

Chinese trade surged last month following the country’s rise in bank lending, leading economists to predict a strong increase in exports over the course of 2010.

Exports grew by 45.7 per cent in February compared to the same month in 2009 despite the lunar new year holiday, which shut down the country for several days last month.

Although global fund managers have been encouraged by some brokers to think of Chinese consumption as an attractive investment, more bearish observers believe that it will be impossible to sustain domestic demand beyond the end of government stimulus measures and bank lending growth.

The immediate prospects for growth outside China may also be fragile.

Exports may be rising strongly now, according to Mark Williams, of Capital Economics, but without clear signs of a final demand recovery in Europe, Japan and the United States, export growth could tail off in the remainder of the year.

The apparent surge in both imports and exports was partly an effect of timing. In February last year the global economy was in the very depths of crisis, flattering any year-on-year comparisons.

Pointing to low savings rates and high unemployment rates of some of its main trading partners, the Chinese Commerce Minister warned recently that the country’s exports could still be at least two or three years from a full recovery.

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[LibLieSlayer]

I no longer shop wallyworld... I feel better.. spend less on more now.

LLS