Imports/Exports

The latest figures on China's imports and exports now show very clearly the impact of the global recession on China's growth. The export sector will continue to see dramatic reductions. predictions are for a 15% drop in 2009 over 2008.

Imports are also dropping. Most of China's imports are raw materials necessary for industrial expansion. With growth slowing imports are also slowing.

The solution remains stimulating domestic growth in China's consumer and industrial sectors. This will take time to gain momentum. 2009 and 2010 are likely to be the transition years. The economy is undergoing a major shift from seeking external growth engines to relying on internal growth engines.

This shift was always going to be necessary but now it has become an imperative. China's ability to grow is now in its own hands rather than in the hands of western consumers buying inexpensive goods at Walmart !

Exports dropped 25.7 percent year-on-year to $64.9 billion in February, the largest fall in more than a decade and the fourth monthly decline in a row. Imports fell 24.1 percent to $60.05 billion.