Following a disappointing first Quarter in which China reported a near flat trade deficit of $0.139 Billion, the overnight release of more positive second Quarter data has seen the Chinese Economy continue to grow. Having risen to $11.423 Billion in April; a considerable rise on estimates for gains of $3.300 Billion; the Chinese Government was quick to stress the importance of growing domestic demand following the release; a move invariably designed to counter criticism leveled against China for not allowing its currency, the Yuan, to strengthen.
Having seen year on year exports strengthen further to 29.9%, imports of only 21.8% disappointed analysts who had forecast gains of around 28.7%; data which will almost certainly lead foreign economies to criticise the Chinese government for failing to allow its currency to sufficiently appreciate. Despite having allowed the yuan to strengthen in recent months, export data implies that the Chinese Government will continue to face criticism for failing to build sustainable growth on domestic demand.
China and the US; one of the former’s greatest critics over current Chinese monetary policy; will be holding a two day meeting beginning today. The value of the yuan will almost certainly be a primary focus of the discussions between the two Economies.
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