The Canadian Press - ONLINE EDITION

Official says China's slowdown has ended but economy not ready for recovery

  • Print

BEIJING, China - China's sharp economic downturn has ended after trade and consumer spending improved in October but the world's second-largest economy is not ready for a recovery and exporters face tough conditions, officials said Saturday.

The economy should be able to meet the government's 7.5 per cent growth target this year, the chairman of the country's planning agency told a news conference during a congress of the ruling Communist Party.

The comments echoed private sector analysts who say economic activity is improving but a recovery from China's deepest slump since the 2008 global financial crisis will be gradual and weak.

"The figures do indeed indicate an obvious trend of the Chinese economy stabilizing," Zhang Ping said.

"That said, we should not let down our guard," he said. "Our conclusion is that the foundation is not solid enough for a rebound in the Chinese economy and therefore we need to step up our efforts."

Trade data on Saturday showed export growth accelerated in October to 11.6 per cent from the previous month's 9.9 per cent. Data released Friday showed auto sales, consumer spending and investment also improved in October.

Zhang gave no indication what new initiatives Beijing might consider. The government has cut interest rates twice this year and is injecting money into the economy through higher spending on building airports and other public works and investment by state companies. But it has avoided a large stimulus after its huge response to the 2008 crisis fueled inflation.

Economic growth fell to a three-and-a-half-year low of 7.4 per cent in the quarter ending in September. Growth for the first three quarters of the year was 7.7 per cent, putting the government's target for the year within reach.

Also in October, inflation fell, giving Beijing room to launch new stimulus if needed with less danger of igniting new price spikes.

The improvement is welcome news for the ruling Communist Party, which is in the midst of a congress to install younger leaders who might benefit from an economic uptick.

Still, Commerce Minister Chen Deming warned that Chinese exporters face tough conditions due to weak global demand and rising operating costs.

"The trade situation will be relatively grim in the next few months and there will be many difficulties next year," Chen told a news conference.

Stronger exports will help manufacturers that were battered by last year's slump in global demand. Thousands closed and survivors slashed payrolls, raising the danger of unrest as Communist leaders tried to enforce calm ahead of the leadership transition.

The import weakness meant China's global trade surplus widened by nearly 90 per cent over a year ago to $32 billion — the highest monthly level this year.

Chen also warned that "growing trade protectionism" might hurt exporters.

World leaders pledged after the 2008 crisis to avoid steps that might hinder trade and hamper a recovery. But Beijing and trading partners including the United States, Europe and Japan have raised tariffs on goods including autos and solar panels in a series of disputes over market access, subsidies and other issues.

Lacklustre Chinese import demand reflects government curbs on lending and investment to cool inflation and overheating.

Those controls helped to crush surging prices but hurt China's large construction industry and depressed its voracious appetite for steel beams, wiring and other materials made of imported iron ore, copper and other commodities. That is bad news for miners and other commodity exporters such as Australia and Brazil that supply China.

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Jim Flaherty remembered at visitation as irreplaceable

View more like this

Photo Store Gallery

  • A baby Red Panda in her area at the Zoo. International Red Panda Day is Saturday September 15th and the Assiniboine Park Zoo will be celebrating in a big way! The Zoo is home to three red pandas - Rufus, Rouge and their cub who was born on June 30 of this year. The female cub has yet to be named and the Assiniboine Park Zoo is asking the community to help. September 14, 2012  BORIS MINKEVICH / WINNIPEG FREE PRESS
  • Down the Hatch- A pelican swallows a fresh fish that it caught on the Red River near Lockport, Manitoba. Wednesday morning- May 01, 2013   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Do you agree with the province’s crackdown on flavoured tobacco products?

View Results

View Related Story

Ads by Google