China warns of slowing demand after the latest trade data showed sales to South-East Asia slowed sharply in September

October 19, 2013 Leave a comment

Updated: Friday October 18, 2013 MYT 8:45:33 AM

China warns of slowing demand

BEIJING: China’s exporters face a difficult time in coming months as demand from emerging markets slows, the Chinese trade ministry warned after the latest trade data showed sales to South-East Asia slowed sharply in September. But China is ready to take measures to support its exporters to ensure the trade sector grows 8% this year as targeted, Commerce Ministry spokesman Shen Danyang said, allowing exporters to see “mild growth” in the next few months.”Although developed countries showed signs of recovery in recent months, some emerging economies are starting to lose growth momentum,” Shen told a press briefing.

”Many risks, such as capital outflows, currency depreciation and rising inflation pressures also exacerbate the economic slowdown in emerging countries,” he said.

The comments follow disappointing trade figures for September released at the weekend, which showed China’s exports falling 0.3%, in stark contrast to market expectations for a 6% rise.

Sales to South-East Asia were especially weak, with growth in September falling to a 17-month low of 10% from 31% the previous month.

Analysts say fears of possible US monetary policy tightening has hurt demand for Chinese goods as investors withdrew their money from emerging Asian economies China’s fastestgrowing export market for the past year.

Yet China has been an anomaly among emerging nations as investors retreat from riskier markets. Not only has China not seen an exodus of capital, it is instead fighting rising inflows.

China’s central bank warned this week that rising capital inflows are fuelling the rate of credit expansion in the world’s No. 2 economy, and that authorities would finetune policy to keep liquidity at appropriate levels.

That capital is still flowing steadily into China was underscored by data on Thursday that showed foreign direct investment (FDI) in September rising 4.9% from a year ago to US$8.8bil, holding within a steady range seen this year. That took the total amount of FDI that China drew in the first nine months to US$88.6bil. – Reuters

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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