Business

China's export growth slows down as global demand falls

Worker in a yarn factory in China
Image caption The success of China's manufacturing sector has been key to its economic growth

China's export growth slowed further in October as the eurozone debt crisis and fears of a slowdown in the US dented demand for its goods, figures show.

Shipments from China rose 15.9% from a year earlier, down from a 17.9% growth in September and 24.5% in August.

Meanwhile, imports grew 28.7%, resulting in a trade surplus of $17bn (£10.7bn)

The data has raised fresh concerns about the impact of a global slowdown on China's export-led growth.

"Export growth continued to drop last month against the backdrop of a sputtering economy in European countries, which is the largest export destination of our country," said Wang Hu of Guotai Securities in Shanghai.

"With the euro debt crisis spreading, we expect export growth to further decline in the months ahead."

Domestic boost?

China's growth in recent years has been led by the success of its manufacturing and export sector, which has helped it become the world's second-largest economy.

However, economic troubles in the US and eurozone, two of the biggest markets for Chinese goods, have led to a decline consumer demand, raising concerns about the prospects for China's economy.

On Wednesday, Christian Lagarde, the head of the International Monetary Fund (IMF), called upon China to alter its export-led growth policy and focus on boosting domestic demand in order to sustain growth.

Analysts said the latest data showed that demand in China was growing steadily.

"Import growth is a bit higher than we expected, showing that domestic demand is still resilient," said Mr Wang.

However, some analysts said the jump in import numbers was not a true indicator of domestic demand.

They said that manufacturers were taking advantage of a drop in commodity prices to build up stock levels and that was impacting the import numbers.

"It's likely that the inventory building still continues, partly because of the declining global prices," said Li Cui of Royal bank of Scotland.

"The producers take this opportunity to build their inventories."

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