Compared with the last year, the General Administration of Customs figures, exposed in February 11, fell 17.5 percent. Thus the 2.8 percent fall in December seems of little impact.

More dramatically, imports dropped down to 43.1 percent year-on-year.

There even occurred a rare decline in monthly foreign trade since the reforming and opening up 30 years ago. That’s the 29 percent year-on-year fall of the combined foreign trade in January.

It’s possible for the foreign trade to continue to drop in the more months to come since the global financial crisis is still clouded. It’s predicted by Su Chang, a macro-economic analyst with China Economic Business Monitor that foreign trade would decline by 10 percent in the first three month of this year. He said, “China’s year record may come to be negative, too. But due to the fall in prices of industrial materials the decline in imports would be substantial.”

One year ago, prices of primary goods which China mainly imports, stood on its historic peek, but now they have plummeted into the trough, which he added.

However, there was an exception last month. During the spring festival, the most important festival for Chinese, we had one week of holiday in January, one month earlier than that as usual. If taking the 5 fewer working days into consideration, it’s said that export actually had a6.8 percent year-on-year rise in January and a 4.6 increase if compared with December.

Economists also pointed out another problem – the worldwide deflationary cycle. There are mainly two reasons for the sharp drop in imports. One was the falling global prices (especially prices of crude oil and farm products). The other was the dropping demand for electronic components, which was a mirror of the retrogression of the country’s manufacturing industry.

Ting Lu, economist with Merrill Lynch in Hong Kong, said that there was no way to foresee the effect brought about by the Chinese New Year, and in a note to clients in the monthly trade figures he gave his suggestion that people should show their ignorance.

It’s said by the experts that China is not the worst among its neighboring countries. Jing Ulrich, analyst with JP Morgan, shows in his recent report that when export is sending a message of warning, the situation in China is much better than some neighboring economies which rely more on hi-tech sector. And, Jing Wang, chief economist of Morgan Stanley, also made his remark that China’s export structure is relatively stable in the region because of its diversity.

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Based on the remarks of Cai Qiusheng, head of the foreign debts section under the capital-account management department at an annual meeting of China’s import and export enterprises, China’s forex reserves declined indeed, but Cai disclosed neither in which month the forex reserves fell below the $1.9 trillion level nor the current size of the forex reserves.

According to the central bank data, at the end of September, China’s forex reserves stood at $1.9056 trillion, which is a growth of 32.92% year-on-year. The reserves increased $377.3 billion in the first nine months of this year, $10 billion more than the year-earlier increment.

Yuan Yuedong, a senior researcher with the global financial market department of Bank of China holds the opinion that the latest reduction would not influence the Chinese economy severely.

Yuan thought the down trend in forex reserves was bought about by the recent slower appreciation of the yuan and short-term depreciation against the US dollar as well as possible increased offshore investment by Chinese companies.

An anonymous investment-bank analyst said the decline of forex reserve might be related to capital withdrawal from China by some foreign institutions which don’t have enough liquidity ability.

But remarks from Commerce Minister Chen Deming earlier was that large amounts of capital do not seem to flow out of China and China was still an attractive destination for FDI.

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He said at a press conference in Beijing that they must take forceful and effective measures to stop undue slowdown of the economy.

Zhang’s words came a day after the central bank cutting the interest rate by 1.08 percentage points, which is the highest in 11 years. The act of cutting interest and the stimulus package are expected to boost domestic investment.

The additional importance of raising domestic demand is gained because of many foreign buyers having slashed their orders with Chinese companies.

The government has showed the details of how they will spend the more than 40 percent of the initial 100-billion-yuan investment package, according to Zhang. It has promised to stop the growth rate from sliding further from the 9 percent in the third quarter of this year with the investment package.

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Many potential buyers in Shanghai are expecting a further decline after the drop in Shenzhen housing prices, declining by nearly 30 percent in the first half. It is showed by the statistics from China Real Estate Index Academy that in Shanghai house market there is a sales drop of 27.6 percent from last year to 8.85 million sq m while a rise of 7.26 percent in housing price.

Hu Yinghua, a researcher at China Real Estate Index Academy, said that Shanghai’s real estate market was going through a mild revision period with the government attempting to maintain the property price stable with no fierce fluctuation.

Chen Wei, senior directors of residential project marketing services at CB Richard Ellis told China daily that there was expected a correction by around 10 percent in the second half, beginning with a price drop.

“It is also up to the real estate by choosing the timing of price declining.” said Chen.

Meanwhile, many real estate developers are committed to not to lower the housing price, despite the declining sales, which will consume their profits and may lead to corporate capital liquidity problems.

According to what a source in a Shanghai-based real estate developers told China Daily, many property developers are trying to maintain the price at the current level through the third quarter with their firm belief that there will be a sales recovery after this period.”If the situation still terrible after the third quarter, the housing price will probably decline,” the source said.

Market insiders expected the price to fall for the fact of the large supply in the second half.”The increasing supply of apartments in suburban Shanghai in the second half may cause a general housing price decline,” said Chen at CB Richard Ellis.

For example, Shanghai Greenland Baoshan Real Estate started a new housing estate near the outer ring, Lvdi Linghai in Baoshan District on June 27, with the opening price of 7,600 yuan per sq m, nearly 20 percent lower than the average price of the buildings in its neighbor.

“But the prices of the downtown buildings may ramain stable because of the limited land available for development,” Chen added.

The number of potential buyers, searching apartments in Shanghai’s real estate agency, declined by two third sine mid-June, according to Uwin, the real estate information provider.

Xue Jianxiong, chief analyst at Uwin, said “There may be a drop of 10 percent of housing price this year due to the large supply and the shrinking demand.” A six million sq m of new supply and unsold 1 million sq m in the first half will be provided.

“But the individual property owners may not cut their prices a lot because they do not have the liquidity pressure, unlike many real estate developers,” Ho added.

There is a decline in the opening price of some luxury apartments in the city centre. Regency Park, developed by Hong Kong-based Hutchison Whampoa Real Estate, was sold at an average price of 33,806 yuan per sq m in the first two weeks after its opening of 162 apartments on June, a 24.4 drop from the average price between Jan 1 and June 5. Though the company attributed the price decline to the disadvantaged location of the apartments, the price decline of 10,000 yuan per sq m promised potential buyers a housing price correction.

“The weaker buoyant buying sentiment also presented in the high end and luxury segments, causing the typically slow winter buying season to go all the way through the spring,” said Ho.

Prince Hills offered 44 new units for sale with an average price of 60,000 yuan per square meter on April 28 and only sold 7 of them as of June 18. Of the 147 units offered in April, Bund Side in the downtown, 17 had been sold by mid June.

However, the price of most luxury apartments is kept firmly in the weak sentiment. The high-end residential apartments saw a 1.6 percent price rise, and 1.7 of the luxury apartments.

“The prices of luxury villas are expected to rise 6 to 8 percent on average in the next half of 2008 due to the scarcity and strong market demand,” said Chen.

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Some insiders said that the declining export growth is attributable to the rising labor and raw material costs, and the government’s tightening policies implemented since last year. And the global economic slowdown is making the situation worse.

The custom figures also show that the trade between China and India is increasing the fastest among China’s major trading partners. The bilateral trade stands at $29 billion, up 69 percent. EU remains China’s largest trade partner, followed by the US. And the imports of primary goods increased fast, which many be caused by the increasing price of the commodities in the international market.

An analyst with HSBC, said that the figures should raise people’s expectations on favorable government policies for export sectors. For example, the textile industry has called for a rise in export tax rebate. And Chinese government has since last years lowered or even removed the export tax rebate of some productions to curb the trade surplus. But some sectors are struggling as a result of a global slowdown, yuan appreciation and rising operating costs, hampering exports anyway.

It is released in the latest report on Shenzhen’s housing market that the average housing prices in May declined 36 percent form the level of last October at 17,350 yuan ($2,540) per sq m to 11,014 yuan per sq m. According to the insider prices are expected to drop another 10 percent as some struggling small and medium-sized real estate developers and speculators are selling properties for cheap to maintain cash flow. And it is reported in some areas housing prices have already dropped 50 percent.

In the first half of this year, the total supply of new residential houses reaches 1.54 million sq m or so, 46 percent of that of the year before. Based on the situation, it is forecasted that another 3.5 million sq m residential housing area will be sold later this year.

It is generally believed that the tightening mortgage policy attributes great to the cool down of the overheating housing market, especially that in the Beijing, Shanghai, Shenzhen, as the housing prices rising has been mainly attribute to speculation.