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China's Export up 21% in Jan. As Global Demand Recovers
Feb 11,2010 08:52CST
data analysis
Source:SMM

BEIJING, Feb. 11 -- China's export grew 21 percent in January as the global economy gradually began to recover, customs data showed on Wednesday.

Exports stood at 109.47 billion U.S. dollars, while imports rose 85.5 percent to 95.31 billion U.S.dollars, the General Administration of Customs (GAC) announced Wednesday.

The trade surplus contracted 63.8 percent to 14.16 billion U.S. dollars.Foreign trade posted a 44.4 percent growth in January 2010 year-on-year.

The hefty increase was due to a lower comparison basis a year ago when China's export sector was hard hit by the global financial crisis, as well as less working days as the Lunar New Year holiday fell in January last year, the administration explained.

"The calendar factor can not change our judgement that the export sector is recovering," said Qiu Gaoqing, a senior financial analyst with Shanghai-based Bank of Communications.

As for the reason why January's exports were down 16 percent from December, Qiu said was that December had three more working days than January.

"December is normally the export peak season for Chinese exporters due to western consumers' Christmas spending," he added.

"We predict that China's export sector has entered a stable recovery stage given the increasing strength of the global economy," Qiu said.

China's exports ended 15 months of decline last month and grew 17.7 percent in December on the back of government policy incentives such as tax rebate.

Despite an annual drop of 16 percent in exports in 2009, China overtook Germany as the world's largest exporter as the latter saw exports decrease by nearly a fifth, the biggest decline for the country in six decades.

Strong exports intensified international pressure on China to strengthen the yuan, or renminbi.

U.S. President Barack Obama last week vowed to get "much tougher" with China on exchange rates and trade to ensure the price of U.S. goods was "not artificially inflated."

Foreign Ministry Spokesman Ma Zhaoxu said last Thursday that the renminbi's exchange was not the main reason for the Chinese-U.S. trade deficit, given the yuan had gained around 21 percent since July 2005 when the government unpegged the yuan from the U.S. dollar.

Obama's hardline was also dismissed by Chinese economists as political rhetoric to appeal to domestic interest groups.

Zhong Shan, Chinese vice minister of commerce, said on Monday in Birmingham, Britain that China would not allow drastic changes to the yuan's exchange rate and China's currency policy should take into account domestic economic conditions.

He estimated annual exports would gain in 2010, but were unlikely to return to the pre-crisis levels of 2008.

Morgan Stanley revised China's export growth for 2010 up to 15 percent from 9 percent, and import growth to 18 percent from 10 percent in a report released on Feb 4.

"We envisage that stronger demand for exports will contribute to stronger economic growth mainly because of the positive impacts on private investment in the manufacturing sector," it said.

The European Union and United States remained China's largest trading partners, Wednesday figures revealed.

The Association of Southeast Asian Nations (ASEAN) surpassed Japan to be China's third largest as Sino-ASEAN trade rose 80 percent to 21.48 billion U.S. dollars after the China-ASEAN free trade area took effect on Jan. 1 this year.

Exports of machinery products added 27 percent year-on-year to 62.51 billion U.S. dollars, accounting for nearly 60 percent of the total monthly export volume.

Exports of appliances and electrical products grew 33.1 percent year-on-year to 24.09 billion U.S. dollars.

 

GAC
General Administration of Customs
trade

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