By: Mike Campbell
US President Barack Obama has met with the Chinese minister, Wen Jiabao in Beijing. Jiabao is the third most senior Chinese leader and is responsible for the Chinese economy. Whilst the two nations are agreed to work together on resolving tensions over North Korea’s nuclear ambitions and on climate change, no such breakthrough was immediately apparent with regard to trade.
Figures released for the September Sino/US trade balance show that the US imports more than five times more from China than it exports ($5.8bn vs. $27.9bn). America has been concerned that China has been “dumping” goods into the US market at artificially low prices; giving them an unfair advantage over domestic products (notably, tires and steel). The US have slapped tariffs on these products; a move which has angered the Chinese. Another US gripe is their belief that the value of the Chinese currency is artificially low and that it has been effectively pegged to the declining value of the Dollar. A low value for the Chinese Yuan makes their exports more attractive internationally; tying the value to a falling Dollar means that the USA gets no upside benefit in its exports to China from a weaker (cheaper) Dollar as their relative cost is maintained.
The European statistical agency, Eurostat, has announced that the 16 Eurozone economies had posted an unexpected €3.7bn trade surplus for September, rather than the €2.3bn deficit predicted. The surplus was due to better than anticipated exports. The Eurozone formally exited recession in Q3, turning in growth of 0.4%.
The Spanish unemployment rate remained at 17.9% of the workforce in Q3. The level is the highest within the European Union and nearly twice the Eurozone average (9.6%). Unemployment across the block is still rising, official figures show.