New World Trade Fears, Despite China Surplus, From Low Base, W Govt Aid

Led by the World Bank, global analysts caution that European debt woes,

which have rattled financial markets and severely eroded the value of the euro in recent months, 

remain a significant threat to world trade.

Led by the World Bank, global analysts caution that European debt woes,

which have rattled financial markets and severely eroded the value of the euro in recent months, 

remain a significant threat to world trade.

In its latest report on global economic prospects for 2010, released on Thursday,

the World Bank cautioned that Europe’s debt crisis had “created new hurdles on the road to sustainable medium term growth.”

Although the impact of the debt crisis has so far been contained, the World Bank said,

“prolonged rising sovereign debt could make credit more expensive and curtail investment and growth in developing countries.”

“Regardless of how the debt situation in high-income Europe evolves, a second round financial crisis cannot be ruled out in certain countries of developing Europe and Central Asia,

where rising non-performing loans, due to slow recovery and significant levels of short-term debt, may threaten banking-sector solvency,” the institution noted.

In the interim, Chinese exports in May jumped 48.5 percent from the same period last year, the country’s customs agency reported Thursday, according to this article in the New York Times.

Imports rose 48.3 percent from a year earlier, as domestic demand for raw materials and other goods was buoyed

by a massive government spending program and a flood of easy credit from state-owned lenders.

Both imports and exports were flattened by the very low level of trade a year earlier,

when the global economy was mired in the depths of financial crisis and a economic recession.

But the figures for last month, which made for a trade surplus of $19.5 billion, were certainly stronger than economists had expected.