July 19, 2010 (Chinavestor) First it was slower GDP growth. Now Beijing is saying China's export growth will slow in the second half of this year to a rate of 16.3% compared with growth of 35% in the first half of 2010. Weaker export growth may be the impetus Chinese authorities need to limit the Yuan's appreciation against the U.S. Dollar because a strong Yuan could be viewed as a threat to Chinese exporters.
The European sovereign debt crisis is probably one factor weighing on Chinese export growth because Europe is a top destination for Chinese exports. An estimated 20% of China's exports find their way to Europe. The State Information Center cited the removal of tax rebates, weaker demand because of Europe’s debt crisis, and comparisons with higher base levels as reasons for declining export growth, according to Bloomberg News.
Chinese exports are expected to a show a full-year increase of 24.5% compared with a 16% drop in 2009. Exports were a record $137 billion in June, Bloomberg reported. Imports are expected to jump 19.3% in the second half of 2010.