BEIJING: India’s exports to China declined by over 24 percent to USD 6.89 billion in the first half of this year, while the Communist trading giant’s exports surged by 10.8 percent to USD 27.29 billion, pushing the bilateral trade to over USD 34 billion.
China’s foreign trade volume continued to drop in the first half, slipping further from a 6-percent decline in the first quarter, but the lacklusture performance was redeemed by the country’s exports to India and other Asian nations.
India-China bilateral trade registered a 1.1-percent increase and touched USD 34.19 billion as India continued to expand the export base for Chinese goods, according to data released by General Administration of Customs (GAC) today.
Despite China’s promises to address India’s concerns over the spiralling trade deficit, Indian exports to the world’s second-largest economy continued to decline.
Last year, the trade deficit touched USD 47 billion, out of the USD 70.59 billion trade. It crossed USD 20 billion half way this year as Chinese exports went up to USD 27.29 billion.
India looks for a sharp increase in Chinese investments to compensate for the burgeoning trade deficit, while hoping for a pro-active opening for its IT and pharmaceuticals industry.
Besides exports to India, China’s exports to Southeast Asia and Africa grew by 9.5 percent and 12.9 percent respectively in H1.
The trade with countries covered by China’s Belt and Road Initiative were more robust, as exports to Pakistan, Israel, Bangladesh and Saudi Arabia saw an average growth of 17 percent, state-run Xinhua news agency reported.
China’s total foreign trade dropped 6.9 percent year-on- year to 11.53 trillion yuan (USD 1.89 trillion) in the first six months of 2015, slipping further from a 6-percent dip in the first quarter adding to China’s worries over the slowdown.
Exports from China, one of the world’s top exporters, rose slightly by 0.9 percent from a year ago, but imports slumped 15.5 percent, weighed down by a gloomy global climate and feeble domestic demand.
The trade surplus expanded 1.5 times to 1.61 trillion yuan, the data showed.
GAC spokesperson Huang Songping described the situation as “grim and complicated” under the sluggish global economy.
Huang attributed the decline in imports to shrinking domestic demand hurt by unsolved industrial overcapacity and falling commodity prices globally.
“Cheaper commodities dragged down China’s import growth by 10.4 percentage points,” Huang said.
The crude oil prices have slumped around 50 percent and iron ore prices have dropped over 40 percent from last July.
Exports were also curbed by rising salaries of Chinese workers and the appreciation of the yuan, Huang said.
The official exchange rate of the yuan against USD, the euro and the yen strengthened by 0.2 percent, 6.9 percent and 2.2 percent respectively during the past 6 months.
Huang said China still faces difficulties as trade with the European Union and Japan, two of its major business partners, tumbled and the global economy remained dim.
Foreign trade has been one of the most forceful economic drivers for China, bringing double-digit growth for decades.
However, a lingering world trade downturn and weakened advantages of homegrown enterprises have led to concerns.
Analysts worry that disappointing imports and exports may dent market faith in the economic outlook, the report said.
China’s economy expanded 7.4 percent in 2014, the slowest in 24 years. Policymakers set the target for economic growth at approximately 7 percent this year and that for foreign trade at 6 percent.
However, the IMF has predicted that China will grow at 6.8 percent this year, followed by 6.3 percent next year and 6 percent in 2017.
