China imports slide 13.8pc
Wednesday, September 09, 2015
Data yesterday showed sharp drops in imports from Australia, the European Union and Japan, which tumbled 29.6 percent, 21.7 percent and 14.7 percent, respectively.
China's imports from the United States also fell at a sharper pace than in July, dropping 5.9 percent.
"Imports are much worse than expected ... and are also a leading indicator for exports, as around half of China's exports are processing trade," said Nie Wen, analyst at Hwabao Trust, Shanghai. "I'm not optimistic about the prospect of exports and it's unlikely China can achieve its export target this year."
Wen predicted the central bank will have to cut banks' reserve requirements at least three more times this year to pump more money into the slowing economy and counteract the impact of capital outflows as investors move their money elsewhere.
Exports in August dropped 5.5 percent from a year earlier, slightly less than a 6 percent decline forecast in a Reuters poll, and improving from an 8.3 percent drop in July. That left the country with a trade surplus of US$60.24 billion (HK$489.8 billion) for the month, far higher than forecasts for US$48.20 billion.
Qu Hongbin, chief China economist at HSBC, said China has to boost domestic consumption to sustain its economic growth. Global investors will be combing China's August data over the coming weeks to see if the economy is at risk of a hard landing.