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Chinese trade slump

February 10, 2012

China has reported a drop in exports and imports for January. Analysts say the slowdown is also the result of the eurozone debt crisis, but warn that figures may be distorted for seasonal reasons.

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Image: AP

Trade in China fell in January, Beijing customs officials said in a statement on Friday. Exports dropped by only 0.5 percent year-on-year to $149.94 billion (113 billion euros). But imports plunged a frightening 15.3 percent to $122.66 billion.

The figures mark the country's worst trade data since 2009 after the onset of the global financial crisis.

Because of the much sharper drop in imports, China's precarious trade surplus widened to $27.28 billion from $16.52 billion in December of last year.

Analysts said the latest trade figures added to mounting evidence that the world's second-largest economy was slowing as the eurozone crisis and current US economic woes impacted demand for Chinese products.

More trouble ahead?

The International Monetary Fund (IMF) had also warned that an escalation of Europe's fiscal woes could slash China's economic growth by half this year.

"The double-digit fall in imports also reflects extremely weak domestic demand as investment slumps," said Alistair Thornton, a Beijing-based analyst at HIS Global Insight.

But the January trade figures have to be interpreted cautiously. They were partly distorted by the earlier-than-usual Chinese Lunar New Year holiday.

Many factories and businesses in the country cut back production or closed their doors completely so that employees were able to travel home and celebrate the spring festival with their families. Lunar New Year celebrations this year led to a five-day reduction in working days.

Author: Hardy Graupner (dpa, AFP, Reuters)
Editor: Shant Shahrigian