China Watch Blog has learnt that China’s imports and exports fell 7.8 percent year-on-year to reach $272.6 billion in January this year, due to the economic downturn and Spring Festival holiday. The festival results in a distortion of the trade figure as most factories in China shut down operations for a week or two, and in some other cases, for even longer periods.
According to a Global Times report citing data from the General Administration of Customs of China, imports fell 15.3 percent year-on-year to $122.66 billion in January and exports slumped 0.5 percent to $149.94 billion. The trade volume hit the lowest point since March last year.
Analysts said the data this January is lower than expectation, but a single month of data cannot reflect the real economic situation.
“The European debt crisis and the US’s economic downturn are both the main events which lead to the export slump in January. In addition, the effect of the Spring Festival and continual property restriction policies cause domestic demand to decrease,” Li Jian, a research fellow at the Research Institute under the Ministry of Commerce (MOC), told the Global Times Friday.
It’s more reasonable to assess January and February data combined to judge whether the current economic policies need to be adjusted or not, Li noted.
Customs figures showed Chinese trade with European, US, Japanese and Association of Southeast Asian Nations (ASEAN) markets all decreased in different degrees in January. However, trade with emerging economies such as Brazil and Russia still kept growing.
“Trade with European, American and Japanese markets decreased from last year due to the economic downturn, and people from ASEAN countries also take Spring Festival holidays,” He Weiwen, co-director of China-US/EU Studies at the China Association of International Trade, told the Global Times Friday.
The decline in trade left China with a trade surplus of $27.3 billion in January, the highest in six months. The Chinese currency strengthened by 72 basis points to 6.2937 against the US dollar on Friday, a new record high, according to the China Foreign Exchange Trading System.
“When the trade surplus rises, people expect the yuan to increase in value, but this pressure will slow gradually,” Li said.
Chen Deming, China’s minister of commerce said Thursday that January’s data would not look pretty, and a stable yuan was needed to help Chinese exporters, Shanghai Securities News reported Friday.
Due to the global economic downturn, Chinese trade growth will continue to be sluggish in the short term, Li added.