Shrivelling demand from the E.U. and U.S. to blame for the decline
For the second month in a row, Chinese exports have slumped in the face of declining demand in key markets such as Europe and the United States. Data from the Chinese government shows the country’s export index has dropped to 46.9 from 48.6 in the previous month.
China’s massive economic growth in recent years has been propelled by robust exports to Europe, U.S. and Canada, with many manufacturing facilities setting up shop near the country’s eastern port cities. But this latest data shows China is not immune to economic uncertainty. Leaders in the country are preparing to handle this changes, mainly by working to encourage domestic demand to make up for the fall in exports. Hong Kong, for instance, has promised its residents and small, corporate and businesses tax rebates, property subsidies, and two months free rent for public housing. In the last three months of 2011, Hong Kong’s economic growth failed to meet economic forecasts when it slowed to 3 per cent, the smallest expansion in two years.