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China's trade surplus shrinks by half

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  • China's trade surplus shrinks by half

    China's trade surplus shrinks

    China's trade surplus shrank by 86.7% in September compared with the same month last year as consumers' growing spending power sucked in imports, official data showed.
    For the first nine months of 2003, China's trade surplus was down 54% on the year before, confirming the trend.

    Imports rose just over 40% in that period to $298bn (178bn) while exports were up 32% to $307bn, the Ministry of Commerce said.

    The latest figures challenge some tenets of the growing debate about China's economic impact, which has focused on a tide of cheap exports pouring out of China.

    Spending spree

    China's imports have risen as tariff cuts give consumers access to cheaper foreign goods following its entry to the World Trade Organisation (WTO) - car sales in particular have shot up by roughly 40% this year.

    Access to consumer credit, a novelty in China, is also growing rapidly, firing up middle class spending power and provoking longer-term fears about debt among international and domestic policy makers.

    The latest economic data came as the ruling Communist Party wrapped up a meeting of its Central Committee (CPC), which focused on measures to help some of those left behind by China's economic boom.

    The CPC resolved to narrow the gap between urban and rural areas, and between rich and poor. It pledged to improve employment, income distribution and social security systems, state-run media reported.

    It pledged to support and protect agriculture by reducing the financial burdens on farmers.

    'Diverse' ownership

    The CPC said that, although public ownership remained China's economic mainstay, it would allow diverse forms of ownership to develop - a euphemism for private enterprise, which now makes up about one third of the economy.

    Separately, industrial output and foreign investment figures showed rises in both, though the pace of output growth has been slackening.

    Industrial output was up 16.3% in September on year-earlier, a poorer performance than the 17.1% rise in August, and its weakest showing since May.

    Actual foreign investment rose 12% in the first nine months of the year to $40.2bn, the Commerce Ministry said.

    Contracted, or promised, foreign investment rose 36% in September to $79.2bn.
    "Every man has his weakness. Mine was always just cigarettes."