China faces pressure on exports

BEIJING -- The pressure is on Chinese exports as the euro sinks against the yuan, Ministry of Commerce spokesman Shen Danyang said on Tuesday.

The yuan was up 10.8 percent against the euro until March 13, when the euro devalued 13.2 percent against the US dollar.

The price advantages of Chinese exports to the European market has been softened by the euro devaluation, said the spokesman. The weak euro will also incite eurozone exports to other markets, adding competitive pressure to China's high value-added exports.

Imports from the eurozone have not been affected much by the fluctuation, as China mainly imports mechanical, electrical and chemical products from Europe, but investment and merger opportunities for Chinese companies have increased as asset prices tumbled, said Shen.

In the first two months this year, Chinese non-financial direct investment in the European Union rose almost ten fold.

China's exports fell 3.2 percent year on year in January but rose 48.9 percent in February, according to the General Administration of Customs.

Growth of exports to the US and the EU hit 48.5 percent and 44.2 percent, respectively, in February thanks to a mini economic recovery there at the turn of the year.

Shen attributed part of export growth in February to a low comparative base in the same period last year.

It is common for the Chinese economy to fluctuate in January and February due to the Lunar New Year holiday, which fell in February this year and January in 2014.

Exports of both textiles and clothes nearly doubled in January compared with the same period last year, driven by higher export rebates since the start of this year.