China's annual rate of export growth slowed in November versus October, vice commerce minister Chong Quan told reporters on Wednesday after an official media briefing.
Export growth in November was even slower than October, Chong said on the sidelines of a news conference releasing a government report on China's long term trade development.
China is due to publish November trade data on Saturday, December 10, with economists expecting the numbers to reveal the weakest growth in two years, excluding an anomalous slide in February when the Lunar New Year holiday disrupted activity.
Headline growth in exports in October of 15.9 percent was its most sluggish in eight months and also the slowest since November 2009 with the volatile February data stripped out.
China's export sector -- a key driver of economic growth -- is set to suffer more headwinds in the coming months, analysts say, as Europe's debt crisis worsens and consumer spending in the United States remains weak.
Wang Shouwen, director of the ministry's foreign trade department, told the news conference that Chinese exporters would face a tough 2012, being squeezed by rising costs at home and fewer orders from abroad.
Next year, there won't be fundamental improvement in Europe or the United States, and costs at home will stay as high as this year, so the foreign trade situation will be severe next year, Wang said.
But Wang added that China may still manage to sell more products in 2012 than in 2011 as long as the European financial crisis does not run out of control.
Economists at UBS reckon a euro zone recession causing a fall in imports only half as deep as that experienced in 2008/09 would wipe around 1.7 percentage points off Chinese GDP in 2012.
Leaders from all 27 European Union countries have a summit meeting in Brussels this week and will vote on a Franco-German plan to change the EU treaty to impose mandatory penalties on euro zone states that exceed deficit targets, aiming to restore market trust and prevent the crisis spiraling out of control.
Wang said China will work particularly hard to increase its imports from Europe and the United States in 2012 as a way to help the struggling rich economies.
In the official white paper, the Chinese government reiterated that it does not deliberately pursue policies designed to deliver a trade surplus and that China is moving towards balancing exports and imports.
Vice Minister Chong added that the government is not manipulating the exchange rate of the yuan.
The Chinese government has never manipulated the exchange rate, and our exchange rate is a floating one based market changes and demands, Chong said.
As for the future, I believe they yuan could be stronger or weaker -- it will move like a wave, he said.
China's yuan has lost about half a percent of its value against the U.S. dollar, since strengthening to a record 6.3354 to the greenback on November 14. It is still about 3.5 percent stronger against the dollar so far this year.
The official dollar/yuan rate is set each day by China's central bank with data issued through the Shanghai-based interbank market, the China Foreign Exchange Trade System (CFETS), on the market's website, www.chinamoney.com.cn.
The dollar/yuan exchange rate may rise or fall 0.5 percent from the mid-point each day.
(Reporting by Wang Lan and Nick Edwards; Editing by Ken Wills)