China – US exports dive

The government in China is due to announce its May trade figures on Friday, and some economists expect that they will show a slowdown in growth.  A  recent report estimates that Chinese export growth dropped to 20 percent year-on-year, down from 29.9 percent in April, while import growth is expected to rise from 21.8 percent in April to 26.9 percent year-on-year.

Experts estimate the slowdown may continue in the second half of the year, as a result of a shrinking demand from both the US and Europe, which are showing some negative signs in their economic recoveries, and from the Chinese government’s tightening policies adopted last year.

China is also experiencing increasing competition from countries where the labour costs are lower.  Russia, Indonesia, Vietnam and Brazil are all competing for the manufacturing business which has hitherto been China’s strength.

China was still showing a balance of trade surplus at the end of April.