Karen Maley has a superlative piece on China’s sale addiction and Beijing’s Tax Breaks for Exporters, she writes. While European political leaders are praying that China will use some of its massive $US3.2 trillion foreign reserve stockpile to buy bonds of debt-strapped eurozone countries, Beijing is busy thinking up strategies for tightening its hold on important European markets.
China has been deeply worried that the spreading recession in its largest export market, the European Union, will crimp demand for its goods. In January, China’s exports to the region slumped 3.2 per cent from a year earlier, as European consumers tightened their belts and cut spending. Even though China successfully boosted its exports to emerging markets, such as Brazil, the country still saw its total exports fall by 0.5 per cent over the year to January, the first decline in more than two years.