China exports slow

China’s exports have slowed this month as the trade surplus came in at $21.35 billion, which is up from $20.21 billion in May although the forecast for the trade surplus was an increase of $24 billion as imports grew 31% from a year earlier to $100.18 billion.

The slowdown has meant that there is an increased pressure on the government to control the appreciation of the yuan to protect manufacturers so that exports can be maintained.

The yuan’s 6.7 percent jump against the dollar has meant that exports have struggled, although inflation has been steadied in a period of global inflationary pressures as the yuan traded at 6.8439 versus the dollar.

Zheng Xinli, the vice head of the Communist Party’s policy research office, indicated that the yuan would no longer appreciate and its current rate and so exporters will have a period of stability in order to recover.

The hardest hit sector was textiles as export growth slowed to 23 percent compared to last year as tax rebates on textile and garment exports may increase as major companies needed the rebates in order to overcome the currency gains and the reduced global demand.

As a result of the slowdown in export growth, political pressures have increased.

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