Statistics for May indicate that growth in key sectors of the productive economy in China, including manufacturing, continues to slow, while capital is increasingly moving into speculative investments in the share market, creating an unstable financial bubble.
Official indices showed a 2.8 percent decline in exports in May, compared to the same month in 2014. The figure was a small improvement on results for March and April, which witnessed year-on-year declines of 14.6 percent and 6.2 percent, respectively.
Import figures painted a starker picture, with a year-on-year slump of 18.1 percent for May, following a decline of 16.2 percent in April. The result bucked expectations of a slight improvement based on the stabilisation of commodity prices.
The continuing decline in imports is bound up with an ongoing slowdown in the manufacturing sector. Imports of raw materials, including coal, refined oil and iron ore, all fell, with the latter dropping by 1.1 percent compared to last year.
According to the preliminary HSBC/Markit purchasing managers’ index, May marked the third month of contraction in the Chinese factory sector, and saw the fastest decline in output in over a year. The index was 49.1 in May, below the 50-point benchmark indicating growth. At the same time, the figures showed a 23-month low in new export orders, along with the worst contraction in real output in 13 months.
Foreign trade volume was down 7.8 percent over the January to May period. China’s trade with the European Union declined by 7.1 percent, and 11.2 percent for Japan.
China’s economic slowdown
Statistics for May indicate that growth in key sectors of the productive economy in China, including manufacturing, continues to slow, while capital is increasingly moving into speculative investments in the share market, creating an unstable financial bubble.
Official indices showed a 2.8 percent decline in exports in May, compared to the same month in 2014. The figure was a small improvement on results for March and April, which witnessed year-on-year declines of 14.6 percent and 6.2 percent, respectively.
Import figures painted a starker picture, with a year-on-year slump of 18.1 percent for May, following a decline of 16.2 percent in April. The result bucked expectations of a slight improvement based on the stabilisation of commodity prices.
The continuing decline in imports is bound up with an ongoing slowdown in the manufacturing sector. Imports of raw materials, including coal, refined oil and iron ore, all fell, with the latter dropping by 1.1 percent compared to last year.
According to the preliminary HSBC/Markit purchasing managers’ index, May marked the third month of contraction in the Chinese factory sector, and saw the fastest decline in output in over a year. The index was 49.1 in May, below the 50-point benchmark indicating growth. At the same time, the figures showed a 23-month low in new export orders, along with the worst contraction in real output in 13 months.
Foreign trade volume was down 7.8 percent over the January to May period. China’s trade with the European Union declined by 7.1 percent, and 11.2 percent for Japan.