China's July exports up but import growth weakens

[August 10, 2010]  BEIJING (AP) -- China's exports grew strongly in July but import growth fell as its rapid economic expansion cooled, possibly hurting global demand.

Exports rose 38.1 percent over a year ago to $145.5 billion while imports gained 22.7 percent to $116.8 billion, the customs agency reported Tuesday. Export growth eased from June's 43.9 percent rate while import growth tumbled from June's 34.1 percent expansion.

Weakness in China's demand for imports could dent its ability to help to drive a global recovery amid Europe's debt crisis and slack sales elsewhere.

China's voracious appetite for imports has eased as Beijing clamped down on a boom in bank lending and construction to avert a possible asset price bubble. Economic growth slowed from the first quarter's 11.9 percent to 10.3 percent in the second quarter.

Foreign economies have felt the impact of falling global commodity price as surging Chinese demand eased. Mining and other companies that enjoyed a windfall from China's boom warn their explosive sales growth will slow.

Import growth was slower than expected, reflecting slowing Chinese investment and lower commodity prices, analysts said.

"The drop in imports might affect those countries that supply China with raw materials," said economist Xing Ziqiang of China International Capital Corp.

Import weakness boosted China's monthly trade surplus to $28.7 billion -- its highest level since January 2009. That could help to reignite complaints about Chinese currency controls and demands for Beijing to allow its yuan to rise in value.

Other indicators also show Chinese demand weakening. An industry group reported Monday that auto sales in China, the biggest market by number of vehicles sold, fell 11.9 percent in July from the previous month to 1.2 million units.

China's export growth has remained strong despite uncertainty about the health of the global economy. But analysts expect demand for Chinese goods to drop as Europe's debt crisis hurts spending by the continent's consumers.

Exports to Europe, China's biggest trading partner, rose 36.4 percent to $28.7 billion despite the debt crisis and the Chinese trade surplus with the European Union soared 56.3 percent to $13.6 billion.

Exports to the United States climbed 29.4 percent to $27.4 billion and the Chinese trade surplus swelled 39.5 percent to $19.4 billion.

"Although the global economy is limping, the export data told us the Western world's economy is still quite stable," said economist Hu Xiaoyue of Shanghai Securities.

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National Bureau of Statistics (in Chinese): http://www.stats.gov.cn/

[Associated Press; By JOE McDONALD]

Associated Press researcher Bonnie Cao contributed to this report.

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