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China’s export growth was close to zero in July, raising the odds the government will take more- aggressive measures to support growth after industrial output and retail sales data yesterday missed estimates.
Outbound shipments increased 1 percent from a year earlier and imports rose 4.7 percent, the customs bureau said in a statement today in Beijing. The trade surplus was $25.1 billion compared with $31.5 billion a year earlier. Export growth was below all 32 estimates in a Bloomberg survey.
Asian nations including South Korea and India are reporting downturns in exports as European economies teeter near recession and U.S. consumer spending slackens amid a jobless rate that’s topped 8 percent for more than three years. Barclays Plc yesterday cut its 2012 growth estimate for China after industrial production rose at the weakest pace since May 2009.
“The external environment is likely to remain lackluster and less supportive of growth for Asia for longer,” Morgan Stanley economists led by Hong Kong-based Chetan Ahya wrote in an Aug. 8 note. “So far, policy makers in the region have been hesitant to initiate another round of tactical stimulus as they remain concerned about the side-effects of such an approach.”
The growth in July exports compared with the 8 percent median estimate in a Bloomberg News survey and 11.3 percent in June. Analysts estimated a 7 percent gain in imports after a 6.3 percent increase in June. The median projection for the trade surplus was $35.1 billion.
The MSCI Asia Pacific Index (SHCOMP) of stocks extended losses after the data, declining 0.5 percent at 12:11 p.m. in Tokyo.
China’s Shanghai Composite Index of stocks fell 0.1 percent. The gauge rose yesterday for the fifth day after a report showed inflation cooled for a fourth month in July, giving the central bank more leeway to ease monetary policy. Separate reports showed industrial output growth unexpectedly slowed last month to 9.2 percent from a year earlier and retail sales rose 13.1 percent, trailing analysts’ forecasts.
Barclays yesterday cut its estimate for 2012 economic growth to 7.9 percent from 8.1 percent and its third-quarter prediction to 7.7 percent from 8.2 percent on the weaker-than- forecast July data.
China’s central bank halted gains in the yuan in the first half of the year, providing some help to exporters amid deteriorating global demand. The currency has fallen 1 percent against the U.S. dollar this year as of yesterday.
The yuan weakened against the dollar today and was trading at 6.3660 at 11:12 a.m. in Shanghai, according to the China Foreign Exchange Trade System.
Exports present the biggest uncertainty to China’s outlook, Song Guoqing, an adviser to the People’s Bank of China, said last month. He estimates economic growth may slow to 7.4 percent in the third quarter, the seventh straight deceleration.
In its second-quarter monetary policy report released Aug. 2, the central bank said the “primary risk for the global economy is still the European debt crisis,” and that the possibility of Europe “triggering a double dip in the global economy can’t be ruled out.”
--Zhou Xin. With assistance from Ailing Tan in Singapore. Editors: Nerys Avery, Scott Lanman
To contact the reporter on this story: Xin Zhou in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Scott Lanman at email@example.com