MercoPress. South Atlantic News Agency

China's imports dropped a record 21.3% in December

China's exports and imports have suffered their biggest decline in a decade. Exports in December were down 2.8% from the same time last year, a bigger decline than November's 2.2% drop, while imports were down 21.3% (17.9% in November), the China Daily said.

The numbers provided fresh evidence of a serious trade slump that has caused a wave of factory closures and staff layoffs, analysts said. The communist leadership has expressed fears of social unrest as economic problems worsen. The BBC's correspondent in Shanghai, Chris Hogg, said that China's economy relies on domestic demand for its goods and services more than any other country in Asia. Only around 30% of the economic activity here is dependent on exports, suggesting that problems in the export sector are affecting less than a third of the economy. December imports fell even more sharply, declining 21.3%, the China Daily reported. That was a bigger decline than November's 17.9% drop. With exports in December worth 111.2 billion US dollars and imports worth 72.2 billion USD that made December's trade surplus 39 billion. That is the country's second highest trade surplus ever, just short of November's record 40.1 billion. Our correspondent adds that the huge decline in imports is partly due to the slowdown in exports. More than half of China's exports are made up of goods which are simply assembled here with components imported from overseas, so as exports drop, the need for those components falls. Steep falls in world commodity and energy prices make it cheaper for China to import them and that again helps to reduce the overall import total. Taken together these figures are more evidence that economic activity is slowing, but not necessarily that that slowdown was much greater last month than it had been the month before. According to JP Morgan, December's export decline was the sharpest since April 1999. "Export growth is likely to be flat in 2009, with negative year-over-year growth in the near-term," said Jing Ulrich, JP Morgan's chairwoman of China equities, in a report. When the global financial meltdown began to bite, some commentators looked to the seemingly unstoppable export engine of China for relief. A series of numbers released in recent months have suggested that China is no more immune to worldwide trade problems than any other large economy, analysts said. With Japan, the US and Europe now in recession, China's heavily trade-dependent economy is expected to harder hit through the coming year. Predictions by the World Bank of growth of 7.5% in 2009, if proved true, would be the lowest recorded since 1990.