Wandering China

An East/West pulse of China's fourth rise from down under.

China fades as Europe’s saviour [The Age]

From the Guardian, published in Australia’s the Age: January data on Chinese imports seem to compound a gloomy worldwide economy picture with Europe still on the brink and anticipated global oil demand.

Another way to look at it is to hold one’s horses – for China, January has seen an unusually high number of public holidays if one factors in the long spring festival break.

And on the back of that report just two days later we have the BBC reporting that Chinese and European leaders from  are meeting for talks ‘likely to be dominated by Europe’s debt crisis.’ In the report, Chinese foreign ministry spokesman Liu Weimin said the debt issue was “at a critical juncture…We believe that as China’s largest trading partner and the largest economy in the world [collectively], it is important for the European Union to resolve this issue”.

Update: Feb 14 – EU leaders in China for debt crisis talks (BBC News)

– – – 

China fades as Europe’s saviour
Katie Allen, London
Source – The Age, published February 12, 2012

A SHARP drop in Chinese imports, a gloomy outlook for global oil demand and a burgeoning US trade deficit are fanning growing fears of a deteriorating global economy.

Signs that demand was slowing in China raised concerns for European nations relying on an export-led recovery from their economic crisis.

There was another blow when the International Energy Agency cut its oil demand forecast for a sixth consecutive month, citing a weak global economy. China said its imports fell last month at the fastest annual pace since the low point of the financial crisis in 2009.

At the same time its exports fell, in the worst performance for more than two years.

As wrangling continued over a solution to Greece’s problems, there were signs the euro-zone crisis and its effect on demand was hurting Chinese exporters. Their sales to Europe suffered the first annualised fall and exports to the US put in their worst performance for a year.

However, it was the fall in imports that exercised market traders on Friday. Many countries, including Britain, have been pinning their hopes on robust Chinese demand.

Analysts cautioned against reading too much into China’s January trade figures, disrupted by this year’s unusually high number of public holidays.

”Exports per working day grew, suggesting that growth in external demand for Chinese goods is only gradually decelerating,” said Wei Yao, of Societe Generale. ”However, the import numbers were surprising. January was the second month in a row of much slower-than-expected import growth.”

Whatever the reasons for China’s exports dip, it will do little to quell criticism from overseas policymakers that Beijing is keeping its currency artificially weak to gain competitive advantage. Such criticisms, particularly by American politicians, were underlined by news of a record trade gap between the US and China. Data from the US Commerce Department showed the gap grew 8.2 per cent last year. Imports from China were almost four times as high as US exports.

The US data reinforced fears about waning global demand and the far-reaching effects of the euro-zone crisis.

The final three months of last year showed a marked slowdown in US export growth.

”With the danger that the euro zone enters a deep recession still very real, weaker demand from Europe will mean that overall US exports may struggle to rise at all this year,” said Paul Dales, senior US economist at Capital Economics.

Fears that the global economy was deteriorating again after some brief-lived new year’s optimism were reflected in the International Energy Agency’s latest forecast for oil demand. The agency believes demand will now grow by less than 1 per cent this year.

Assuming a technical recession – two consecutive quarters of contraction – for a large part of Europe, the agency said, the region was likely to record the world’s biggest relative decline in oil demand this year.



Filed under: Beijing Consensus, Charm Offensive, Chinese Model, Domestic Growth, Economics, European Union, Influence, International Relations, Peaceful Development, Public Diplomacy, Soft Power, Strategy, Trade, U.S., Yuan

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