US subprime crisis to affect China's exports
Updated: 2008-03-09 09:45
China's export-oriented companies will face a demand drop affected by the US subprime mortgage crisis, a senior banking official said on the sidelines of the parliamentary session.
"The subprime crisis has reduced consumption demand and risk tolerance of US and European investors, which will affect China's exports and the operation of export-oriented companies," Liu Mingkang, chairman of the China Banking Regulatory Commission.
Liu made the remarks while attending a panel discussion of legislators from Jiangsu Province, noting foreign trade is an economic pillar for eastern provinces like Jiangsu.
China's imports and exports have kept an annual increase rate of over 20 percent since 2000. And the volume of foreign trade exceeded Japan and ranked the third in the world in 2003.
"This year, China's foreign trade growth rate may drop below 20 percent, even one-digit growth rate is possible," he said.
Affected by the subprime crisis and disastrous snowstorms, the economic growth of Zhejiang, Jiangsu and Guangdong provinces slowed down in January, Liu said.
Although the subprime crisis will not have a lasting impact on China's finance and people's livelihood, the official suggested export-oriented medium and small companies keep alert.
"The tight monetary policy will bring difficulty in financing for these companies," he said.
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