CRI听力:October exports drop narrows, pressure remains

Latest customs data show China's exports measured in yuan fell 3.2 percent year on year in October, a slower pace of decline than the 5.6 percent fall in September, while imports rose 3.2 percent, up from 2.2 percent last month.

Stripping out the impact of yuan depreciation, exports in U.S. dollar terms fell 7.3 percent year on year in October while imports slipped 1.4 percent.

October trade growth fell short of market expectations, especially amid favorable moves in China's exchange rate, which was expected to boost competitiveness.

Bai Ming, a researcher with the Ministry of Commerce, admitted it's hard to be upbeat about the prospect of the country's foreign trade.

"China's foreign trade continues to fluctuate, is yet to be stablized. Overseas, weak global economic recovery and rising protectionism bring growing pressure. Domestically, increasing labor costs have weakened our competitiveness. Our imports in the first ten months, if measured in the US dollar, has registered a sharp decline."

The World Trade Organization estimates global trade will grow more slowly than expected this year, expanding by just 1.7 percent.

That is well below the April forecast of 2.8 percent, recording the slowest pace of trade growth since the financial crisis of 2009.

An official index predicting future trade growth prospects ended previous rises in the past three months by dropping a marginal 0.2 points, indicating upcoming trade pressure.

Readings on export orders in both the National Bureau of Statistics and the Caixin PMIs swung back into contraction territory in October, pointing to weaker external demand ahead.

Bai Ming with the Commerce Ministry acknowledged the goal of stablizing trade appears to be difficult.

"The pressure is really huge. Given the 2 percent drop in the first ten months, the goal could be achieved only if it rises by over 10 percent in the coming two months. It may be possible yet difficult."

The Chinese currency has declined over one percent against the U.S.dollar since its October 1 inclusion in the IMF's SDR basket, breaking through the critical 6.7 threshold.

Bloomberg Chief Asia Economist Tom Orlik pointed out it is possible the weakness in the yuan has been insufficient to offset the drag on competitiveness from past gains, and protectionism is likely having an impact, with G20 members introducing more than 1,200 trade control measures over the last five years.

Even so, he said he continues to believe that a weaker yuan, resilient global demand, and China's other policy measures to support competitiveness, such as freezing the minimum wage, will drive a return to modest growth.

Meanwhile, China's exports are expected to stabilize in the fourth quarter with booming business due to approaching holidays such Christmas, and imports might maintain marginal growth as processing imports continue to drop.

For CRI, this is Liu Mohan.