Data released Tuesday has added to concerns about China’s exports slowdown, but it would be premature to conclude that made-in-China products are losing their competitiveness.
In the first two months of this year, exports slid 13.1 percent in renminbi terms. Some observers see it as proof that rising costs in the mainland have reduced the appeal of China goods in the global market.
The picture is a bit different if we look at the numbers of China’s major trade partners, Bank of China pointed out in a research note.
China products accounted for 22.4 percent of US imports in January, up 1.2 percentage point from a year ago. In December, the share of China goods rose to 21.3 percent in Europe’s total imports, compared to 19.2 percent in the same period the previous year.
The figures suggest that the weakness in China’s overall exports has to do with factors beyond cost competitiveness, such as soft demand in major markets.
Still, if the situation persists, China will see a further narrowing of its trade surplus, which will dampen fresh investments and put more downward pressure on the GDP.
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