Drop in foreign trade gives China bargaining power

In the mountain of data that the China Customs department routinely puts out, one nugget stands out. The country's reliance on foreign trade dropped to 50.1 per cent in 2011. This dip has tremendous implications for the future. For one, it indicates China is transferring to a more domestic-oriented growth mode. And more importantly, the economy has enough room to cut its reliance on foreign trade, giving it more bargaining power in the Eurozone bailout tango. The only blip on this horizon is China's own mounting local government debts. Foreign direct investment dropped for the third consecutive month in January with investment from 27 European Union nations shrinking 42.5 per cent year-on-year.