More bad news on China; foreign trade slides 9.7%
10 Sept 2015 4:54 AM IST
China on Tuesday said that its foreign trade in August decreased 9.7 <g data-gr-id="22">per cent</g> year on year to about $320.8 billion amid rising concerns over the record drop of $93.9 billion in the Communist giant’s foreign exchange reserves last month. The latest data released by General Administration of Customs (GAC) shows that while exports fell 6.1 per cent year on year to 1.2 trillion yuan, compared with an 8.9 <g data-gr-id="23">per cent</g> drop in July, the imports slumped 14.3 <g data-gr-id="24">per cent</g> to 836.1 billion yuan, compared with July’s decrease of 8.6 <g data-gr-id="25">per cent</g>.
The trade surplus expanded by 20.1 <g data-gr-id="28">per cent</g> to 368 billion yuan in August. In the first eight months of 2015, foreign trade slipped 7.7 <g data-gr-id="29">per cent</g> year on year to 15.67 trillion yuan, the GAC figures showed. Exports dipped 1.6 <g data-gr-id="30">per cent</g> to 8.95 trillion yuan in the January-August period, while imports fell 14.6 <g data-gr-id="31">per cent</g> to 6.72 trillion yuan. Analysts said that the recent nearly four per cent devaluation of Yuan also helped to push up the value of exports from China, world’s largest trading nation. Qu Hongbin, chief China economist at HSBC, attributed the slump in export growth mainly to sluggish external demand, especially exports to the European Union (EU) and Japan.
Meanwhile, China’s foreign exchange reserves fell for the fourth straight month to $3.56 trillion in August, down by a record $93.9 billion from the previous month. China, the holder of world’s largest forex reserves $3,771,347 <g data-gr-id="34">millions</g>, has accrued its massive foreign exchange reserves by its successful exports in the past few decades. About $1.20 trillion of forex reserves were saved in American bonds. The current foreign exchange reserves mirrored a sluggish foreign trade, said Tan Yaling, dean of the Beijing-based China Forex Investment Research Institute.
“The yuan began to fluctuate in <g data-gr-id="21">August,</g> and is not the reason for the depletion in reserves since May,” she said. On August 11, the central bank devalued the yuan by about 2 <g data-gr-id="20">per cent</g> against the dollar, the biggest one-day currency devaluation in two decades.
Dividend tax rules eased to boost markets
Chinese investors holding a stock for more than one year would be exempted from a 5-per cent dividend tax from Tuesday, a move aimed at boosting long-term investment following recent stock market collapse in the world’s <g data-gr-id="43">second biggest</g> economy.
Those who have held a stock for one month or less will have to pay 20 per cent of the dividend they receive as income tax when they sell the stock, the government said today.
People who have held a stock for over one month to one year will have to pay a 10 <g data-gr-id="44">per cent</g> dividend tax when they sell the stock, state-run Xinhua news agency reported.
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