An intense economic week for China. The accommodation of their productive system keeps emerging economies concerned. First of all, because China’s foreign trade fell during September 8.8% vis-á-vis same month last year. This change manifests the circumstantial domestic weakness of the world’s second-largest economy. This decreasing tendency has been sustained for ten consecutive months, reaching an overall 17.1% fall in twelve months. Additionally, exports fell 1.1%

On the same month, the Consumer Price Index (CPI) increased 1.6% compared to same month last year. This mark is below the expectations of a rise in 1.8 percentual points. This tendency is reinforced by the 2% increase registered in August, which raises expectation for new monetary policy measure in order to further stimulate the economy.

Trade used to be China’s economic forte. Current economic conditions are making difficult for China to sustain this model. That is why they are managing to make a transition from an industrial production based economy, to a consumption oriented one. The fall on imports and exports will clearly impact foreign investors, especially rentier economies such as those in Latin America and the Caribbean. If the situation is not managed wisely, it will affect domestic prices, generating social convulsion. It is certainly a fundamental moment to keep an eye on China.

Annex Asia Publishing

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