Falling commodity prices to boost growth

The decline in global commodity prices could prove a significant boost to China's faltering economic growth, the Ministry of Commerce said on Tuesday.

"The average price of China's imports dropped 10 percent during the past six months while the country's exports remain equal in comparison with export values last year," said Shen Danyang, the ministry spokesman.

"But global declines in the prices of imported commodities have substantially reduced the production costs of some domestic enterprises, and the terms being negotiated for foreign trade have also been substantially improved."

With global commodity prices expected to remain weak in the second half of the year, Shen said China is expected to continue benefiting.

The ministry said that the import prices of eight key categories of commodities had declined, including crude oil, plastics and soybeans, resulting in a total reduction in costs worth $76.95 billion in the first half.

Li Jian, a researcher with the ministry's international trade and economic cooperation institute, said: "The price decline for imported commodities, especially for China, the world's leading consumer of raw materials, has helped improve the economic performance of Chinese enterprises.

"We believe the super cycle in commodity prices has now come to an end, and the bull market in commodities, running since 1999, has gradually faded just as China's economic growth pace has slowed over the past few years.