December exports rise, imports shrink

China’s exports rebounded in December but imports shrank in a sign of weak domestic demand. Total trade in 2014 grew just 3.4 percent, well below the official 10 percent target.
Exports rose 9.7 percent in December to USD227.5 billion, up from the previous month’s unexpectedly low 4.7 percent growth, customs data showed yesterday. Imports declined by 2.4 percent to $177.9 billion, better than November’s surprise 6.7 percent contraction but still a sign of weak demand.
Chinese demand for imported oil, iron ore, food and other goods has cooled as economic growth slowed, falling to a five-year low of 7.3 percent in the quarter ending in September.
For the full year, exports rose 6.1 percent to $2.3 trillion compared with 2013 while imports rose just 0.4 percent.
Communist leaders are trying to nurture self-sustaining growth based on domestic consumption instead of trade and investment. But their plans require keeping exports strong to avoid job losses in trade-related industries that employ millions of people. The commerce minister said at the start of 2014 that Beijing hoped for overall growth in imports and exports of 10 percent.
Major markets for Chinese goods including the United States should “stage a slight recovery this year, which should provide support to Chinese exports,” said Julian Evans-Pritchard of Capital Economics in a report.
But demand in China is “likely to remain subdued” and hopes for a rebound in investment or the real estate industry “will be disappointed,” said Evans-Pritchard.
“Import growth is likely to remain weak,” he said.
Chinese leaders have publicly rejected launching a large-scale stimulus, saying growth will have to come from economic reforms. But they unexpectedly cut interest rates in November in a sign they were worried growth was slowing too abruptly. They also have launched targeted measures including pumping more money into construction of railways and other public works.
The gap between strong exports and weak Chinese demand meant the country’s global trade surplus nearly doubled in December, expanding 94 percent over a year earlier to $49.6 billion. For the full year, the surplus rose 47 percent to $382 billion. Joe McDonald, Business Writer, Beijing , AP