How will the Global Economy Affect China's International Trade?

According to newly released customs data, China's imports and exports shrank at an accelerated rate. A global economic downturn triggered this sharp fall. However, for an economy whose growth rate heavily relies on exports, shrinking overseas demand means squeezed corporate profit-margins, lower income for workers and more job cuts in export-oriented enterprises. So what impact will the trade slump have on China's overall economy? Will trade volumes continue to fall amid the worsening global economic climate, and what needs to be done to fuel the economic momentum?
 

We will try to find answers to these questions and more right after this break.

·        China's exports and imports declined for a second consecutive month in December, reflecting a slowdon in external and domestic demand amid the financial crisis. According to the General Administration of Customs, exports fell 2.8 percent year-on-year to over 111 billion U.S. dollars, while imports fell 21.3 percent to slightly more than 72 billion U.S. dollars.

·        In terms of global demands and the economic crisis, China may be among the hardest-hit countries. In addition to declining orders from overseas, the appreciation of the Chinese currency has also added burdens on exporters as a strong Renminbi is increasing their production costs. where export-oriented enterprises are abundant, to find out how manufacturers are coping.

·        As the trade slump continues to swallow export companies and forces many to change production models, the global economic slowdown has also begun to have a serious impact on China's ability to attract foreign direct investment. FDI to China fell for the third consecutive month in December with 5.7 per cent less foreign funds entering the country as compared to a year earlier. In the past decade, China has been one of the biggest FDI recipients in the world. So will the global financial crisis change the trend and negatively affect China's growth? For more on that, Biz China talked to.