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The Straits Times

www.straitstimes.com Published on Jan 11, 2013

China's trade growth rebounds

Data shows worst downturn since 2008 global crisis is receding BEIJING - China's trade growth rebounded strongly last December in a positive sign for the gradual and still uncertain recovery of the world's No.2 economy. Export growth more than quadrupled from the previous month to 14.1 per cent while imports - which failed to grow at all in November - rose 6 per cent in a sign of increasing domestic demand, data from the Customs bureau showed yesterday. The trade figures add to evidence that China is gradually emerging from its worst economic downturn since the 2008 global crisis. But analysts say a recovery is still shaky and will be too weak to drive a global rebound without a turnaround in the United States and Europe. China wants to shift the basis of economic growth to domestic consumption and services, a strategy that promises smaller but more sustainable gains. That could hurt commodities suppliers such as Australia, Brazil and some African economies, where Chinese spending has fuelled an economic boom. Analysts yesterday questioned whether China's recovery can maintain its current pace. "We have reason to believe that year-end momentum will not carry over into the new year," said IHS Global Insight analyst Alistair Thornton. "With our projection for continued contraction in the euro zone and continued slowdown in the US economy, we believe China's export sector will face another uphill battle this year - an even tougher one than 2012." China's trade surplus for 2012 jumped 48.1 per cent from the year before to a four-year high of US$231.1 billion (S$287 billion), official data shows. The increase was largely due to low growth in imports as a result of commodity prices declining last year. Total imports rose just 4.3 per cent to US$1.82 trillion, while exports rose 7.9 per cent to US$2.05 trillion. The US overtook debt-troubled Europe as China's biggest trading partner. Exports to the US totalled US$351.8 billion last year; those to the 27-nation European Union were US$334 billion. China's total trade grew just 6.2 per cent last year, well below the government target of about 10 per cent. Separately, China's foreign exchange reserves, the world's largest, rose to US$3.31 trillion at the end of last year to the highest level since February, central bank data showed yesterday. The huge surpluses have caused friction with China's rivals in the West, headed by Washington, which says Beijing keeps the yuan artificially low in order to make its goods cheaper overseas. However, the rate of growth has slowed in recent quarters. Separate data from the central bank shows Chinese banks cut back lending in December from November. They extended 454.3 billion yuan (S$88.6 billion) in new loans in December, down from 522.9 billion yuan the month before. For the whole of last year, Chinese banks granted 8.20 trillion yuan in new loans, up 732 billion yuan from a year earlier, the central bank said, as Beijing has encouraged banks to lend more in a bid to boost growth. AGENCE FRANCE-PRESSE, ASSOCIATED PRESS
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