China trade surplus surges despite economic weakness

BEIJING- Agence France-Presse

China reported stronger trade data than expected prompting hopes that economic growth is rebounding for the world’s second largest economy after a slowdown to a three-year low in 2012.

China’s trade surplus surged in 2012, but total imports and exports grew slowly owing to weakness at home and abroad, official data showed yesterday, while analysts warned of another tough year ahead.
The trade surplus in the world’s second-largest economy jumped 48.1 percent from the year before to a four-year high of $231.1 billion, the national customs bureau announced.

The increase was largely due to low growth in imports as a result of commodity prices declining last year. Total imports increased just 4.3 percent to $1.82 trillion, while exports rose 7.9 percent to $2.05 trillion.

And China’s total trade grew just 6.2 percent last year, well below the government target of about 10 percent.

Customs spokesman Zheng Yuesheng told reporters that “a sharply slowing world economic recovery, weak international market demand and rather big downside pressure on the domestic economy” weighed on the results.

China’s economic growth slowed for seven straight quarters to the end of September, while the broader global economy also faced weakness in 2012.

Data for the three months to the end of December are due at the weekend, while inflation figures will be released on Friday.

 
The European Union -- China’s biggest trade partner -- continued to suffer a prolonged debt crisis, and economic recovery in the United States, Beijing’s number two commercial counterpart, remained subdued.

Zheng added the negative factors hurting trade last year remain in place in 2013, though he still saw some reason for optimism, citing efforts to boost growth by China and other major economies.
 
“We expect trade growth in 2013 to be slightly better than 2012.” The jump in the trade surplus - which in the past has been a source of friction with China’s commerce partners - was mostly a result of better terms of trade “due to lower commodity prices”, RBS economist Louis Kuijs said in a research note.

One bright spot was that exports and imports hit new single-month highs in December, rising 14.1 percent to $199.2 billion and six percent to $167.6 billion respectively, the figures showed.
Analysts, however, attributed the strong performance largely to one-off factors including better US data in the fourth quarter and rushed shipments by Chinese exporters at the year-end.

“Economic growth in developed economies may remain slow, so we think the challenges to China’s exports remain,” Sun Junwei, a Beijing-based economist with HSBC, told AFP. “China’s economic recovery will depend on whether domestic demand will turn for the better.” Analysts have expressed growing optimism that China’s economic growth accelerated in the final three months of last year, citing stronger recent data including retail sales, while manufacturing activity has also picked up.

Chinese authorities have said they are committed to rebalancing their economy more towards domestic demand factors.