econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 12 August 2015

China exports slump 8.3%

Written by , GEI Associate

According to the customs data, Chinese exports fell 8.3% in July from a year earlier, far worse than expected. The figure suggests a strong downward pressure on the Chinese economy in the second half of the year. But, as we shall see below, the problems behind this slowdown do not all originate in China.

Sluggish demand is a fundamental reason that causes the exports to slide. The U.S. economy is growing slowly under massive QE. The manufacturing purchasing managers' index (PMI) only rose slightly to 53.8 in July from a 20-month low of 53.6 in June. The EU still flounders in economic stagnation. The investor confidence index of Germany fell sharply to 25 points in August. These two areas, the two largest trading partners for China, are a significant part of the decreased demand for China's exports: Demand from the United States dropped 1.3 percent last month; exports to the European Union fell 12.3 percent in July.

The investor confidence index of Germany:

As for developing countries, Russian manufacturing activity declined in June for the seventh straight month, with the PMI below 50. Although the manufacturing PMI of Brazil climbed to 47.2 in July, the reading below 50 still suggests the contraction in the manufacturing sector.

The relatively strong Chinese currency also causes the export weakness. Beijing has been keeping yuan strong to support domestic buying power as well as to encourage the international use of its currency for political purposes. As ANZ Research shows, the currency's nominal effective exchange rate has risen by 13.5 percent since June 2014. Although a strong yuan can help prevent capital outflows, it certainly provides a drag on exports.


Editor's note: In the last two days (since this article was written) China has devalued the yuan renminbi by more than 3%. This is nearly 1/4 of the effective rise over the past year mentioned by the author.


The export sector of China had been a major contributor to growth in past years, constituting about 30% of GDP. As exports tumbled, this has exerted additional slowdown pressure and requires growth to rely more on domestic demands. It also implies that policies will continue to be relaxed in the domestic market.

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted. You can also comment using Facebook directly using he comment block below.




Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Slow Economic Growth Will Be Around For A Long Time
The Job Guarantee, Wage-Price Inflation And Alternative Solutions: Part 2
News Blog
What We Read Today 27 March 2017 - Special Public Edition
Is Less More In The Smartphone Market
Average Gasoline Prices for Week Ending 27 March 2017 Statistically Unchanged - Again
What We Read Today 27 March 2017
Why New Jets Could Destroy Airlines
March 2017 Texas Manufacturing Survey Continues to Expand
Wage Growth After The Great Recession
Is OPEC Losing Its Ability To Influence Oil Prices?
Many Worry That The Great Recession And Mounting Student Debt Have Stunted Millennials' Financial Development
Infographic Of The Day: Visualizing The Shifting Income Distribution Of American Jobs
Early Headlines: Asia Stocks, Dollar, Oil All Down, Gold Up, Border Wall Obstacles, US To 'Fix' Gov With Business Ideas, ACA Death Spiral, US C-I Lending Down, Merkel Election Boost, And More
Most Read Articles Last Week Ending 25 March
Funded By The Crowd
Investing Blog
Market And Sector Analysis 25 March 2017
Earnings: A Lot Less Than Meets The Eye
Opinion Blog
Is The 20th Century Still The 'Hayek Century'?
Yellen's Dangerous Glass-Steagall Repression
Precious Metals Blog
These Gold Stocks Will Produce Much Bigger Gains Than Gold Itself
Live Markets
27Mar2017 Market Close: US Dollar Falls Into The 98 Range, WTI Crude Slips Into The 47 Handle, Wall Street Generally Sour And Down
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government































 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2017 Econintersect LLC - all rights reserved