March figures for the Chinese economy cause concern
15/04/2015
Chinese exports for March 2015 fell in value by 15% year on year, partly because of the high value of the yuan. Exports to the European Union were down in value by more than 19%, while the drop in the value of exports to Japan was 24.8%.
Conversely, though, the exchange rate did not help imports. The value of goods coming into China in March was 12.7% lower than in the same month in 2014. Reuters interpreted this as a sign that demand in China’s domestic market is “tepid”.
While this is disappointing news for footwear, leathergoods, automotive and other companies who secure a high proportion of their sales in China now, there were cautious words of encouragement from the International Monetary Fund (IMF), which has predicted overall growth in the Chinese economy of 6.8% in 2015 and of 6.4% in 2016. The deputy director of the IMF’s research department, Gian Maria Milesi-Ferretti, said at a press briefing in Washington DC on April 14: “We think [this] is a good slowdown for China. It is associated with a more balanced pattern of growth and with a reduction in vulnerabilities.
“Policies will do less to push growth at all costs, and this is going to have some short-run negative effect on the level of growth but positive medium-run effects because you have slower growth of credit, slower build-up in imbalances and, ultimately, a more balanced structure of the macro economy.”
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