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Wang Xiangwei

Mainland exports dived last month as the impact of the Asian financial crisis on the country's foreign trade deepened, the official media reported yesterday, citing Customs figures.

 The trade surplus, however, continued to rise strongly to US$31.38 billion in the first eight months, up 22.7 per cent over the same period last year.

 Analysts said the strong increase in the trade surplus would help to provide buoyant support to the yuan's stability.

 Yesterday, the mainland currency strengthened against the US dollar at the Shanghai foreign-exchange market, prompting the central bank to sell yuan to stabilise the exchange rate.

 The sharp rise in the Japanese yen also contributed to the yuan's gain.

 Last month, exports fell 1.4 per cent year on year, compared with a rise of 3.5 per cent in July.

 Exports fell 1.5 per cent in May, the first decline in nearly two years.

 Imports also continued on a downward trend, falling by 0.3 per cent year on year. The trade surplus last month was $4.67 billion.

 The Asian financial crisis continued to lower growth in mainland foreign trade despite Beijing's efforts to increase tax rebates on exports and provide cheap bank lending to exporters, Xinhua said yesterday.

 In the first eight months, exports rose 5.5 per cent year on year, down from the 6.9 per cent growth in the first seven months.

 Imports rose only 0.4 per cent, down from 0.7 per cent in the first seven months.

 According to forecasts from the State Information Centre, a government think-tank, mainland export growth was expected to continue to slow throughout this year, rising 3.1 per cent in the third quarter.

 Meanwhile, imports were predicted to grow 2.5 per cent in the same period, the centre said.

 Analysts said falling imports reflected sluggish domestic demand.

 More importantly, they said the Government also suspended imports of many key commodities such as oil to help bail out domestic manufacturers.

 The mainland's export growth has slowed significantly from a record rate of 21 per cent last year.

 Exports to Japan, South Korea and Southeast Asian countries have all dropped.

 However, trade officials said they were confident of achieving a 10 per cent growth target.



Surplus tops US$31b despite exports fall