GENEVA — Feeling the effects of the global economic slump, China’s exports are forecast to grow by 4.2 percent in volume next year compared with a projected increase of 10.1 percent for 2008, a World Bank report said.
This story first appeared in the December 10, 2008 issue of WWD. Subscribe Today.
From January through October, many key Chinese exports saw strong gains, with textiles up 20.6 percent to $55.3 billion. Apparel exports rose by 2.8 percent to $98.4 billion.
But the World Bank’s “World Economic Prospects 2009” report forecasts a more tepid performance for world trade volume, which is expected to contract for the first time since 1982 to post a 2.1 percent decline compared with this year’s anticipated 6.2 percent expansion.
The main mechanism for the economic slowdown in rich and emerging countries next year will be through investment, which is estimated to decline 3.1 percent in high-income nations and to slow in developing nations to 3.4 percent from more than 13 percent in 2007.
Emerging economies, which next year will generate 100 percent of global growth, are also expected to face higher borrowing costs and reduced access to capital, the report said.
Global economic growth in 2009 is forecast to decline to 0.9 percent, with emerging economies expanding by 4.5 percent, down from 6.3 percent this year. Expansion is projected to turn negative in high-income nations, with growth in the U.S. expected to contract by 0.5 percent and by 0.6 percent in the European area.
In China, where growth in the third quarter of 2008 eased to a gain of 9 percent year-over-year, expansion next year is expected to increase by 7.5 percent, substantially down from the high of 11.9 percent recorded in 2007.
The study warns that the global financial turmoil “could intensify further, sparking a prolonged credit crunch and a global recession,” and adds that the possibility the situation in rich nations may “deteriorate substantially cannot be ruled out.”