Summary
Concern about the impact of a weak US was exaggerated - 2007 and 2008 Ql data point to a growing gap between declining US import growth and buoyant Asian exports, partly because of fast rising sales to new markets such as the Gulf region.\n In the mid-1990's bmm, GDP grew at double-digit rates but also inflation started to soar - largely due to the impact of price reforms - threatening to stoke up a wage-price spiral. Thiswas the catalyst for the substantial surge in trade - and investment - that has propelled China into its current pole position in world trade, especially in goods such as toys and textiles and other light manufactures, but also assisting a rise in its share of trade in equipment such as office machinery and computer accessories. * Imports have also risen sharply but with a strong focus on raw materials metals, cotton etcj and oil along with investment equipment - less than 10% of China's imports are consumer goods.
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Extract
China
Highlights and Key Issues
* Following news that May's headline rate of inflation fell to below 8%, the government announced a hike in fuel prices ranging from around 5% for electricity to 18% for petrol and diesel. However, this will have a relatively low impact on inflation; the main weight in the CPI basket is foods, where hopes are pinned on prices flattening off - not just because global prices may be stabilising but also due to special factors in China itself starting to unwind, in particular the winter crop problems and the lingering impacts from avian flu an...See the full content of this document