| Abstract | China's export growth slowed from 25.7 percent in July 1997 to 3.4 percent in June 1998, arousing concerns that China has lost its export price competitiveness as a result of its decision to keep a stable Renminbi amid the Asian financial turmoil. The slowdown of export growth in June 1998 was due mainly to sluggish import demand in Japan, South Korea and the Association of Southeast Asian Nations (ASEAN), and to a less extent, a general contraction of credits in the region. In light of the causes of China's recent slowdown in export growth, a devaluation of the Renminbi may not be effective in fostering China's exports. The Chinese government has introduced a number of measures to increase the liquidity of its exporters. China's exports of manufactured goods to the United States (US) and European Union (EU) markets have remained competitive so far. In the longer-run, when the Asian economies stabilize, China is going to face increasing competition from other developing Asian economies. The Mainland has to further improve its investment environment, and increase the efficiency and competitiveness of its industries to maintain the growth momentum of its exports. |
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