- Rajiv Biswas, Asia-Pacific chief economist at IHS Global Insight
China's trade data disappointed in October, strengthening the case for more stimulus to underpin domestic demand in the world's second biggest economy amid softness in overseas markets. Even though the Chinese government has already cut interest rates several times this year and softened the exchange rate to support the ailing economy, latest trade report suggests that a greater risk of hard landing remains. Exports plunged 6.9% last month from a year ago, falling for a fourth consecutive month, while imports plummeted 18.8%, resulting in a record high trade surplus of $61.64 billion, the General Administration of Customs reported. In contrast economists had predicted exports to slide 3.0% following September's 3.7% decline and imports to drop 16.0%, improving from a precipitous fall of 20.4%. Other data this week are expected to show continued deflation in the industrial sector, and consumer-price inflation easing in October to a 1.5% annual pace.
Top officials signalled that they would not tolerate a sharp slowdown. President Xi Jinping said last week that average annual growth should be no less than 6.5% in the next five years to reach the nation's goal of doubling 2010 GDP and per capita income by 2020.
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