Slower Trade for China

Published on Author bednart15

China slowing economy

Chinese trade data were below expectations for November. Exports grew by 4.7% instead of the expected 8.2% growth rate. During the same time, imports to China fell by 6.7%. This combination of slow, but still growing exports and lowered imports increased the trade surplus to $54.4 billion, the highest it has been in more than a decade. Yet, these numbers are indicative of continued slowdown in Chinese economic growth.

The “Chinese miracle” is slowing down as exports grow by slower and slower rates. Both the fall in imports and slowing of export growth are partially explained by the recent drop in consumer prices and transportation costs from decreases in global oil and gas prices. But, the drop in imports shows a decrease in consumption by Chinese consumers, a disheartening statistic for planners that seek to move the economy to consumption-based growth.

These slower growth numbers have increased calls for the central government to engage in stimulus measures, ranging from public spending to the lowering of reserve ratios. The hopes of both of these measures would be to stimulate spending by consumers and add money into the economy to further catalyze growth.


2 Responses to Slower Trade for China

  1. It would be useful to know the composition of slower import growth. I suspect that petroleum price declines have yet to reach China’s shores, that the oil is purchased before it’s loaded onto tankers. But that’s just a hunch, I have no specific knowledge.
    Looking at “real” imports or import volume — that is, trying to remove such price effects — provides a good indicator of lower domestic economic activity. It also means a bigger domestic savings-investment imbalance, if continued at the current pace and assuming away capital flight and other things that would lead to reporting errors, the difference is about $600 billion a year.

  2. I am curious to see how the recent drop in oil prices will affect an economy like China vs the United States due to China’s high coal usage. Despite the magnitude of China’s economy, they consume 8.5 million barrels less than the United States per day although they are still the second largest oil consumer in the world according to It would be interesting if the low prices continue and will push up oil usage and decrease the amount of coal used in China for the long term.