China Exports Suffer Record 17.5% Decline

(Financial Times – Geoff Dyer)

Chinese exports recorded their biggest decline in more than a decade in January, falling 17.5% from the same month the year before as the impact of the global economic slump gathered pace.
Imports to China plummeted a dramatic 43.1% in a further indication of sharply lower demand in the Chinese economy over the past few months which has caused unemployment to soar. Both figures were worse than expected.

January was the third month in a row in which Chinese exports fell. But the pace of decline accelerated from the 2.8% drop in December and the decline in imports was much sharper than the 21.3% contraction in December.

Economists cautioned that the January trade figures partly reflected the earlier lunar new year holiday this year, which meant there were fewer working days than in the same month the year before. The full picture will become clear only when February’s data become available. Peng Wensheng at Barclays Capital estimated that after taking into account holidays, exports declined by 7% in January and imports by 35.9%.

However, even with that caveat, many had been expecting a steep contraction in China’s exports given the recent trade figures from other large Asian exporters. Taiwan’s exports fell 42% in December, South Korea’s by 17% and Japan’s by 35%. All three countries are important suppliers of components that are assembled in factories in China. Read more here.