Figures from October showed that China’s export growth slowed further on fears from the eurozone debt crisis and a slowdown in the US.
Unsettled investors and squeezed households throughout the countries of developed economies have put a huge debt in the demand for Chinese goods, figures show.
Exports from China still saw a 15.9% increase from one year earlier, though the slowdown is unsettling compared with a 17.9% growth in September and a 24.5% growth in August.
Additionally, the country increased its imports by 28.7%, which resulted in a trade surplus of some £10.7 billion.
The new data has raised concerns from analysts concerning the impact of a Chinese export slowdown on the global economy.
Wang Hu of Guotai Securities said that the slowdown in exports can be attributed to the sputtering European economies, which are the largest export destinations for China. Wang went on to say that China is expecting further decline in growth in the months ahead as the eurozone crisis shows no signs of ending soon.
China has become the world’s second largest economy on the back of the boom in its manufacturing and export sector, but could be crippled as consumer demand from the United States and the eurozone decline.
Domestic growth needed
To remedy this, head of the International Monetary Fund (IMF) Christian Lagarde has urged China to alter its economy policy from export-led growth to fostering domestic demand. With this, China can hope to sustain its growth among global stagnation.
Analsysts say that the latest data shows demand in China growing steadily, especially as import growth came in higher than expected. Mr. Wang said that this shows that “domestic demand is still resilient.”
However, some experts say that the jump in import numbers does not accurately display the rate of domestic demand. They say that manufacturers are taking advantage of lower priced goods and commodities to build up their stock levels, rather the figures illustrating a boom in demand from the consumers in China.
While producers take the opportunity to build their inventories in the face of declining global prices, China could be facing more uncertainty in its future.