China’s exporters are feeling the effects of Europe’s debt crisis. While they shipped more goods in October, exports fell well short of estimates.
Europe is China’s biggest export market, and Brian Jackson, from the Royal Bank of Canada, says the slowdown there will further dent China’s economy:
“Growth is definitely easing. And I think it will continue to ease over the next few months, but not collapse like we saw in 2008.”
Flagging export growth is adding to concerns about a slowdown. Leaders have begun talking in recent weeks about “fine tuning” macroeconomic policy to maintain economic growth.
GDP growth slowed in the third quarter to 9.1%, its weakest in more than two years. But most experts still say a healthy domestic appetite will help China avoid a hard landing – which is reflected in October’s strong import figures.
“Chinese consumers are holding in there. We’ve got ongoing spending on infrastructure, and public housing construction, as well. When you add it up, they’re going to offset some of the weakness from abroad.”
So while China’s not immune to Europe’s debt crisis, steady growth at home could help prevent it from catching a bad case of Europe’s debt woes.
Bottom line: China’s exporters feel the impact of the eurozone crisis. But strong import numbers indicate a healthy domestic appetite, and a possible soft landing.