New Year or Euro crisis: China’s January exports fall, imports plummet 15.3%
China's exports fell in January the first decline in more than two years, raising fresh concerns about the impact of a global slowdown on its economy. Exports dipped 0.5% from a year earlier hurt by sluggish demand and factories being shut during the Lunar New Year.
Imports fell by 15.3%, resulting in a trade surplus of 27.3bn dollars which was a six-month high. The fall in imports comes as China has been trying to boost domestic demand in an attempt to offset slowing exports.
Analysts said while the closure of establishments during the Chinese New Year affected the numbers, the decline could not be attributed to the festival alone.
They said that the bigger-than-expected drop, especially in imports, was worrying as it gave an indication of slowing growth.
The collapse of imports begs particular attention, said Ren Xianfeng of IHS Global in Beijing.
A fall of over 15% in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest.
Earlier this month, the China Federation of Logistics and Purchasing reported that the import index for January fell to 46.9 from 49.3 in the previous month, showing slowing demand at home.
Despite these numbers, analysts said the dip was likely to be short-lived and imports may start to rise in the coming months.
The export sector has been key to China's economic growth in the past few years as global firms have turned to Beijing to take advantage of its low-cost manufacturing.
However, a slowdown in the US and the Euro zone, which are two of the biggest markets for Chinese goods, has seen the pace of growth of shipments slow in recent months.
The debt crisis in the Euro zone and high rate of unemployment in the US have hurt consumer confidence and dented demand for Chinese goods. Official figures showed that bilateral trade between China and the European Union fell more than 7% in January.
China's trade surplus has been a politically sensitive issue, especially with trade partners such as the US. Businesses and policymakers have accused China of keeping the value of its currency artificially low in a bid to boost its foreign sales.
They have argued that China's high trade surplus has been detrimental to their economic growth. The latest data comes ahead of Chinese Vice President Xi Jinping's visit to the US this week.