Chinese Foreign exchange reserves rising further
A State Administration of Foreign Exchange spokesman announced on June 12 that in the first five months of this year, China's State foreign exchange reserves reached $140.91 billion, $l billion up from the end of last year. The steady increase in the reserves, which provides solid support to the stability of the renminbi amid the Asian financial crisis, is attributed to China's favorable balance of international payments, a result of rising exports and a continuous inflow of foreign investment. Analysts said the strong reserves will help the Chinese Government stick to its non-devaluation policy despite the impact of the depreciation of the Japanese yen. Dai Xianglong, governor of the People's Bank of China, expressed his confidence over the stability of the renminbi earlier in June. His view is shared by a senior World Bank officials.
China's total foreign trade amounted to $123.69 billion in the first five months of this year, 5.4% more than last year. Exports generated $71.11 billion, an 8.6% increase over last year, leaving the country with a $18.53 billion trade surplus. The delayed impact of the Asian financial troubles took a toll on China's exports. Exports dropped 1.5% in May, ending 22 months of steady growth. The rate in the first four months of this year was 11.6%.Meanwhile, four months of steady growth in imports ended in May when weak domestic demand led imports to drop 2.5%. China imported $52.58 billion worth of goods in the first five months, up 1.5% from the same period of last year.
While exports to countries hardest hit by the crisis dropped, foreign trade firms' efforts in tapping new markets have worked. Exports to the United States, the European Union, Russia, Australia, Africa and Latin America have all surged to double-digits in the five-months. Exports to Russia grew 57.4% more than the same period of last year. The United States has surpassed Hong Kong to become the mainland's second largest trade partner. Japan remains China's lead trade partner. Both imports and exports between the two countries increased in the period. China's exports to the United States rose 18.1% to reach $13.34 billion. Imports from US amounted to $6.41 billion, up 2.6%.
The processing trade remained the major growth point of China's exports in the first five months. It generated $38.87 billion, jumping 9.5%, or $3.16 billion, from the first five months of last year. Nevertheless, the growth rate of processing trade imports has slowed, indicating that the sector's exports will have a hard time in the near future. Although processing trade imports grew 2.5% during the first months of the year to $26.97 billion, they dropped 6.1% in May. Buoyed by the government's new tax-exemption incentives,capital goods imports by firms with foreign investment swung down, then up. Imports rose to reach $1.4 billion in May. The five-month total volume was $6.02 billion. The export of manufactured products jumped 12.7% to $63.46 billion in the first five months, accounting for 89.2% of the nation's total export volume.
chinavista.com |
