China's annual rate of export growth slowed in November versus October, Vice Commerce Minister Chong Quan said on Wednesday, confirming market expectations that deteriorating external conditions are dragging on the world's No 2 economy. Indeed, a combination of high cost pressures at home and lack of improvement in the European and US economies points to "severe" conditions for Chinese exporters next year, said commerce ministry foreign trade official Wang Shouwen.
These views were given further weight when influential think tank, the Chinese Academy of Social Sciences (CASS), issued forecasts for 2012 predicting the weakest economic expansion in more than a decade. Official data on Saturday is expected to show exports in November grew at their weakest annual pace in two years, excluding an anomalous slide in February when the Lunar New Year holiday disrupted activity.
--- Official says to import more from Europe, United States
--- CASS sees 2012 growth below 9pc first time since 2001
"Export growth in November was even slower than October," Chong told reporters on the sidelines of a news conference releasing a government report on China's long-term trade development. Exports in October grew 15.9 percent from a year earlier, the most sluggish pace in eight months and also the slowest since November 2009, when volatile February data is excluded.
China's export sector - a key driver of economic growth - is set to suffer more headwinds in the coming months, analysts say, as Europe's debt crisis worsens and consumer spending in the United States remains weak. Chinese officials have already expressed growing alarm over the sluggish global economy and November purchasing managers' indexes showed the giant manufacturing sector was shrinking.
CASS said it saw GDP growth easing in 2012 to 8.9 percent from its 2011 call of 9.2 percent. It expected consumer prices to rise by 4.6 percent in 2012, down from a 2011 forecast of 5.5 percent but still above the 4 percent level the government regards as comfortable. It also projected China's fixed-asset investment growth would slow to 22.8 percent in 2012 from an estimated 24.5 percent this year.
But the think tank - one of China's foremost institutions, staffed by a mix of influential economists and many former senior officials - cautioned against the need for significant stimulus to fight the moderation in growth. "The direction of macro-controls should not be shifted towards loosening from tightening to support growth. Economic growth will slow steadily and appropriately, it's best to maintain an 8-9 percent growth rate," CASS said in a "blue book" of economic forecasts. China's economy faces a tough 2012, squeezed by rising costs at home and fewer orders from abroad, with many economists expecting full-year growth to come in below 9 percent for the first time since 2001.