Strong Euro lowers trade with Beijing
Beijing (AsiaNews/Agencies) – European exports to China are rapidly decreasing tank to the strong Euro and the changing tastes of the Chinese. China reported that its trade surplus for October came to a record billion, a figure that is larger than its surplus for the entire year of 2003. Over the last three months, China imported an average of .7 billion a month from Europe, a figure that was almost 5 percent lower than imports in the same three months of 2006..
Chinese imports from Japan and the United States are still growing, but at a slower rate than they had been. At the same time, Chinese imports from the rest of the world are growing at a rapid pace that seems likely to continue. At the beginning of this decade, about half of China’s imports came from those three industrial areas. Now their combined share is down to a third.
That may reflect a growing Chinese thirst for commodities, including food products and oil, and a declining appetite for the kind of machines that it once needed to gear up its industrial capacity. Many of those machines came from Germany, which as recently as mid-2004 was running an annual trade surplus with China of about billion. Now Germany is running an annual deficit of more than billion, contributing to a European deficit of 5 billion over the last 12 months.
Experts say that the strong Euro is also a root cause making US and Japanese imports more competitive: The European deficit with China is still smaller than that of the United States, with a figure of 2 billion, but the gap is narrowing. The American deficit is 18 percent higher than it was a year earlier, while the European one has grown by 46 percent. China has come under increasing pressure from the United States and Europe to allow its currency to appreciate,: During the most recent 12 months, through October, the dollar lost 5.3 percent of its value against the Chinese Yuan. The euro gained 7.6 percent against the Yuan, while the British pound rose 3.3 percent
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