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BEIJING / AP
China’s Cabinet approved measures to boost exports in a move that might inflame tensions with Western trading partners that accuse Beijing of flooding their markets with steel and other goods at improperly low prices.
The announcement comes as Beijing struggles to reduce a glut of goods in an array of industries and reverse an export decline that threatens to cause politically dangerous job losses. Its efforts so far have prompted complaints by European and US steelmakers and others that it is violating free-trading pledges.
In its latest measures, the Cabinet promised more bank lending, an increase in tax rebates and support for export credit.
Chinese exports contracted by 1.8 percent last month compared with the same period last year and are down 7.6 percent so far this year.
“The foreign trade situation is complicated and grim,” said the Cabinet statement. “Promoting foreign trade to return to stability is important for economic stability and upgrading.”
Beijing is trying to shrink bloated companies, many of them state-owned, in industries including steel, coal, glass, cement and aluminum in which supply exceeds demand. That has led to price-cutting wars and heavy losses. The announcement follows a Cabinet announcement last month promising to boost steel exports with bank loans and other support.
In March, Washington responded to a flood of low-cost steel from China by announced anti-dumping tariffs of up to 266 percent on some Chinese steelmakers.
Britain’s government faces pressure to act after Tata Steel cited low-cost Chinese competition when it announced plans in April to sell money-losing operations there that employ 20,000 people. Elsewhere in Europe, steelworkers have protested in Brussels outside the European Union headquarters.
Also in April, China pushed back against its trading partners, announcing anti-dumping duties on steel from the European Union, Japan and South Korea.
Monday’s announcement also said Beijing will support companies in setting up foreign distribution centers and other sales infrastructure and shifting some operations abroad.
As part of the campaign to reduce overcapacity, China’s minister of human resources announced plans in February to eliminate 1.8 million jobs in coal and steel. Beijing announced a 100 billion yuan ($15 billion) fund to help laid-off workers find jobs.
Plans for other industries have yet to be announced.
Producer price falls slow in April
BEIJING / AP
Chinese producer prices declined at their slowest rate in 16 months in April, official data showed on Tuesday, a positive sign for the world’s second-largest economy.
The producer price index (PPI), which measures prices of goods at the factory gate and is a leading indicator of consumer inflation, fell by 3.4 percent from a year ago, the National Bureau of Statistics (NBS) said in a statement.
The figure was ahead of the median estimate of a 3.7 percent decline in a Bloomberg News survey of economists, and the indicator’s best performance since December 2014.
Producer prices in the Asian giant have been falling for years, and low consumer inflation had stoked fears of deflation until recently.
The consumer price index rose 2.3 percent year-on-year in April, the NBS said in a separate statement, in line with expectations and the same figure as the previous two months.
The figures may bring some cheer to the Chinese economy, which is grappling with slowing growth, huge overcapacity and mounting debt problems.
Month-on-month, the PPI increased by 0.7 percent, the second rise in a row.