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China's trade outlook worsens, Europe blamed

China's trade outlook worsens, Europe blamed
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China’s trade outlook for this year is worsening, the country’s Commerce Ministry says.

Beijing singled out problems in the European Union – China’s biggest overseas market – as the core difficulty for exporters.

China’s exports to the EU slumped 16.2 percent in July from the same month last year.

Overall export growth virtually stalled last month it was up just one percent on a year ago.

China aims to increase total trade by an average of 10 percent in 2012, but shipments have been volatile so far this year.

A Commerce Ministry spokesman said: “With the European debt crisis spreading and the global economy recovering at a slower than expected pace, China’s trade situation in the second half is expected to become more severe.”

At the same time it was revealed foreign investment in China from Europe and from other Asian countries slipped. Beijing said that was only temporary and that multi-national companies remain confident about China’s prospects.

Firms in the United States, Germany, Singapore and Japan appear to bear that out. Year-on-year data for July showed investment inflows from Germany jumped 27.1 percent to $1 billion, while those from Singapore surged 25 percent to $4.4 billion and commitments from Japan grew 19.1 percent to $4.7 billion. US inflows ticked one percent higher to $2 billion.

China’s economy expanded at its slowest pace in more than three years in the second quarter, up 7.6 percent on 2011 as demand at home and abroad slackened