The trade surplus is up, but imports plunge. Although the government targeted domestic demand, the latter dropped. By neglecting workers’ wages and rights, spending has been negatively affected. Brexit is set to reduce export prospects to the European Union.
Beijing (AsiaNews) – China’s General Administration of Customs released data today indicating a drop in both exports and imports.
Despite a rise in the trade surplus, experts warn that this trend will impact domestic stability. Brexit and low domestic demand will also play a role.
According to official data, always viewed with some suspicion by international agencies, the nation’s trade surplus rose to US$ 52.3 billion from June’s US$ 48.1 billion, the best results this year.
This is due to imports, which decreased by 12.5 per cent in July, worse than analysts expected; by comparison, exports fell 4.4 per cent last month.
Exports to the United States, China’s largest foreign market, fell 2 per cent in July, whilst those to the European Union, the second largest foreign market, fell by 3.2 per cent.
The trend in the EU market is expected to continue following Great Britain’s pullout of the European Union (Brexit).
Chinese imports from the United States dropped by 23.2 per cent.
China’s total exports tumbled 7.4 per cent year-on-year in the first seven months of 2016. Imports are down 10.5 per cent.
Despite Beijing's efforts, domestic demand appears sluggish. The government has repeatedly said that "imbalances and uncertainties" in international markets can only be beaten “by China’s outstanding people Chinese’. So far, this has not yet materialised.
Domestic and foreign experts note the “futility" of focusing on domestic demand when both wages and workers’ rights are not protected by the government.
Always protecting investors and not workers may be useful for the party, but not for the economy, noted an economist with Morgan Stanley. But this does not help an economy that needs steady wages and rights for everyone. Without them, no one spends.