Top Biz News

Export slump eases as demand revives

By Ding Qingfen (China Daily)
Updated: 2009-12-12 07:29

A woman working at a textile factory in Huaibei city, Anhui province. China's exports are likely to remain sluggish next year and may inch up slowly in the months ahead. [China Daily]

China's exports fell at a much slower pace in November, the smallest decline this year as recoveries in the US and Europe helped revive demand, according to statistics released by the Customs department on Friday.

Exports fell by merely 1.2 percent last month to $113.65 billion over the same period last year, compared with the 13.8 percent decline in October.

Imports also rebounded strongly, rising 26.7 percent over the same month last year to $94.56 billion, compared with the 6.4 percent decline in October. The nation's trade also climbed 9.8 percent from a year earlier.

"There has been considerable improvement, but it is still below forecasts," said Denise Yam, economist with Morgan Stanley Asia.

"The stronger performance (of exports and imports) has been due to the growing demand from overseas, and the low reference point of last year," said Dong Xian'an, chief economist with Shanghai-based Industrial Securities.

In November 2008, the nation recorded its first year-on-year decline in exports and imports, largely due to the global financial crisis.

In the third quarter of this year, the US economy registered its first year-on-year growth since late 2008. The latest figures also show that the eurozone economy has grown by 0.4 percent from July to September, a signal that the regions are finally shrugging off the recession blues.

The only gloom that looms on the horizon is the hazy short-term outlook for overseas demand. Federal Reserve Chairman Ben S. Bernanke recently indicated that "tight credit" and "high unemployment" continue to weigh on the US economy.

"Exports may continue to be sluggish and inch up slowly in the months ahead, and probably record positive growth in December," said Li Wei, economist with Standard Chartered.

Both Standard Chartered and Industrial Securities are of the view that China's exports would grow by 10 percent in the first quarter of 2010.

Imports have been outperforming exports in the past few months. "The strong demand for commodities is eyeball-catching, and the momentum would continue," said Li.

Imports of crude oil, iron ore, copper and refined petroleum products have been the major drivers for November, surging 28, 8.3, 57.8 and 47.7 percent in value. Imports of plastics and motor vehicles also jumped 58.1 and 74.7 percent.

But with the government's efforts to boost domestic consumption taking off, import growth during the first quarter of next year may remain stagnant at 20 percent, said Industrial Securities.

The sharp improvement would also increase the calls for yuan revaluation, feel analysts.

Premier Wen Jiabao said recently that such calls are "unfair" as China faces rising protectionism and a stable yuan would be beneficial to global recovery.

According to figures from the Ministry of Commerce, nearly 101 trade-remedy investigations have been filed against China by 19 countries, involving sales of over $11 billion.

Wang Chao, Assistant Minister of Commerce, said China would strive to enhance its industrial competitiveness by leveraging its hi-tech prowess and also help brands to battle trade disputes.