From China, more weak economic data
By Jia Lynn Yang,
BEIJING — China’s exports remained anemic in August, and imports fell for the third consecutive month, according to data released Monday, adding to mounting evidence that the world’s second-biggest economy is stuck in the doldrums.
Exports were up just 2.7 percent last month compared with the same month a year earlier, marking the worst August report since the depths of the financial crisis in 2009. Imports dropped 2.6 percent, according to the customs bureau.
The continued stream of bad economic numbers is turning into a political headache for China’s leaders, who are in the midst of orchestrating a once-in-a-decade turnover in the top echelons of government.
A less-robust China also complicates efforts by U.S. and European policymakers to revive their slowing economies.
As the end of the year draws nearer, pressure is growing on Beijing to hit the country’s goal of 7.5 percent growth. While meeting the annual growth target has been relatively easy for China’s leaders in past years, doing so this year could be a struggle.
The latest numbers suggest that China’s economy is getting hammered by not only depressed sales in Europe but also by falling demand at home. And other challenges continue to crop up. According to data released over the weekend, industrial output grew in August at the slowest rate in three years, and inflation accelerated for the first time in five months.
Growth in factory production dipped to 8.9 percent, compared with 9.2 percent the month before, according to the National Bureau of Statistics.
Rising food prices pushed inflation up to 2 percent. While that number is still low, the specter of higher inflation could discourage policymakers from acting as boldly as they did after the financial crisis, when they launched a massive stimulus package and pumped billions of dollars into the economy.
The twin cornerstones of China’s spectacular growth in recent years have been exports and investment. But growth in exports, which usually accounts for about one-quarter of the growth in China’s gross domestic product, has dwindled sharply in recent months — dropping from 11.3 percent in June, for example, to 1 percent in July.
Analysts and some Chinese government leaders have conceded that in order to create a more stable economy, the country needs to lean less heavily on exports and investments and instead encourage more domestic consumption.
At the Asia-Pacific Economic Cooperation CEO summit over the weekend, President Hu Jintao said a “lack of balance” still hindered economic growth.
But that hasn’t stopped officials from turning again to infrastructure as an economic fix. Last week the government announced it was approving dozens of new building projects, sending stocks up.
Liu Liu contributed to this report.