China exports on downward track

In the first half of 2008, Chinese exports were up by nearly 22 percent. That's 5.7 percentage points lower than its growth in the same period last year. And considering the appreciation of the yuan and rising labor costs, exporters are feeling the pinch more than ever.

In the first half of 2008, Chinese exports were up by nearly 22 percent. That's 5.7 percentage points lower than its growth in the same period last year.

China has introduced a series of policies capping exports, as the trade surplus has increased over the past several years. On the one hand, the export structure has improved, and the trade surplus has eased to some extent. But on the other hand, the macro-control measures have heated up competition among exporters. Labor-intensive, small- and mid-sized companies have been having a hard time.

Zhao Jinping, researcher of DEV'T Research Center says, "Exporters have seen their growth decrease, as well as their profits. Labor-intensive companies, especially, have felt the pressure."

The textile and clothing industry lost 46 thousand jobs from January to May due to shrinking overseas sales. Analysts point out growth in Chinese exports is trending downwards and decelerating. They believe that China's economy will take a hit if the trend continues.