Euro zone woes may hit exports: China

The euro zone and the International Monetary Fund had to bail Greece out in April after it was unable to roll over its debts in the bond market,raising fears about the financial health of other big borrowers and triggering a plunge in the euro.

“In the next few months the negative impact from Europe’s debt crisis on Chinese exports may gradually show up,” the ministry said in a statement distributed at a monthly news conference.

Yao Jian,a spokesman for the ministry,told the conference that export growth would slow from July onwards.

“In the next two to three months,we will keep a close eye on changes in European markets,especially in Germany,Spain,Italy and Britain,and take some measures,” Yao said. He did not specify what steps China would take and when.

But Yao did say that China might cut export tax rebates for energy-intensive products,thus penalising the manufacture of such goods,in a bid to reach its goals for cleaner growth.

China is racing against the clock to meet its five-year plan to cut energy intensity per unit of GDP by 20 percent in the years from 2006-2010.

The commerce ministry also said the sovereign debt crisis in the euro zone was one of several uncertainties hanging over the world economy and would limit the pace of the global recovery.

Despite May’s export surge,it was hard to be optimistic about full-year prospects,the ministry said.

By contrast,China’s brisk recovery would keep sucking in imports at a fast pace. As a result,the country’s trade surplus would gradually fall further.

The surplus in 2009 shrank to $196 billion from $295 billion in 2008.