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City reports another fall in exports

SHANGHAI'S exports declined sharply last month, widening from their downturn in March and leading some analysts to believe a rebound may not be sustained if external demand continues to remain weak.

Exports fell 26.2 percent year on year in April to US$25.13 billion, compared with a decline of 16.4 percent in March, according to a statement yesterday from Shanghai Customs.

There was a glimmer of hope, however, as the Shanghai Statistics Bureau reported that the decline in industrial production moderated in April, falling 5.2 percent year on year to 184 billion yuan (US$27.1 billion), compared with a 7.1 percent drop in March.

"The contraction of production again reflects the negative influence of the global recession on the city's economy. But from the new data, we can see some signs of a recovery," said Wang Zehua, a bureau analyst.

Other experts were less optimistic as both the city's industrial output and exports disappointed for the sixth consecutive month.

"The mixed data showed that the recovery path for the city won't likely be smooth," said Lu Jianfeng, a Bank of China analyst. "If demand from the United States and Europe fails to pick up in a sustained manner, any improvement in exports or manufacturing will be short-lived."

Shanghai's exports to European Union countries fell 32.1 percent in April to US$5.42 billion, according to the Customs statement. The decline was 13.5 percentage points higher than in March.

Customs officials also said that exports to the US and Japan also posted big drops in April, but the declines were smaller than those for the EU. Specific figures were not provided.

Shanghai's economic growth tailed off to 3.1 percent in the first quarter of this year after posting a 9.7 gain for all of last year, the first single-digit growth in 17 years.

On Monday, Shanghai Party Secretary Yu Zhengsheng said he expected that Shanghai's industrial output would return to growth in June as the city's month-by-month economic indicators are improving.

Shanghai Mayor Han Zheng said on Wednesday that Shanghai is confident it will achieve economic growth of 9 percent this year and noted that consumption, investment and employment are showing signs of recovery.

"We expected retail sales and investment to improve last month," said Wu Ke, a Zhongtian Investment Consulting Co analyst. "As exports may be volatile this year, consumption and investment will play key roles in helping the city realize its economic target."


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