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China Export Data Suggest West’s Recovery Remains Tepid
Export Growth Weakens in December, Highlighting Challenges
China Export Data Suggest West’s Recovery Remains Tepid - Wall Street Journal - WSJ.com
China's export growth weakened in December, casting doubt on a hoped-for recovery in demand from the U.S. and Europe.
By Richard Silk
In this Dec. 10, 2013, photo, trucks carry containers that were unloaded from a ship at a port in Qingdao, in eastern China's Shandong province.
Associated Press
BEIJING—China’s export growth weakened in December, casting doubt on a hoped-for recovery in demand from the U.S. and Europe.
Exports in December were up just 4.3% compared with the same month a year earlier, down from a much stronger 12.7% year-over-year rise in November, according to customs data released on Friday.
China’s traditionally important export sector faces a range of challenges, from higher labor and land costs to an appreciating currency that eats into its competitiveness..
As the U.S. and Europe regain economic momentum, experts expect China to benefit from better export demand. But the slow pace of improvement in December was a letdown for many.
“The lift from developed markets has not been as strong as expected,” said Junwei Sun, an economist at HSBC Holdings PLC. “This year might be a better year [for exporters], but the pace of improvement could be very modest.”
The poor export growth may in part be due to more than trade flows. China’s State Administration of Foreign Exchange said in December it was tightening supervision of trade financing to stop speculative “hot money” flows from being disguised as trade. That likely dragged down an already weak growth number, Ms. Sun said Friday.
Official data showed a jump in December 2012 that many economists attributed to capital flows misreported as trade.
By contrast, the latest import figures were strong, beating forecasts with an 8.3% year-over-year rise in December, up from 5.3% in November. They were boosted by high raw-material shipments. China brought in 6.33 million barrels a day of crude oil in December, a record, and copper, iron ore and plastic imports were up strongly, too. That could indicate that companies are building up inventories again after running them down earlier in the year, said Shuang Ding, an economist at Citigroup, but he cautioned that the trend may not last long.
“I don’t think this represents a sustained restocking across the economy,” he said. “Domestic demand remains quite sluggish.”
Still, strong imports meant that the country’s trade surplus—the difference between exports and imports—narrowed to $25.6 billion, from $33.8 billion the previous month. The decline relieves a source of potential tension with the U.S., where some politicians worry that China keeps its currency too cheap, benefiting its exporters but hitting China’s potential as a market for U.S. goods.
Exports totaled $2.21 trillion for the year as a whole, up 7.9% from 2012, while imports rose 7.3% to $1.95 trillion. Total trade grew 7.6% in 2013, narrowly missing the official target of 8% trade growth.
China’s Customs Administration predicts that the country’s trade will improve compared with 2013 as demand from the West improves.
“China’s foreign trade will continue to grow steadily as long as there are no unexpected global or domestic events this year,” said customs spokesman Zheng Yuesheng at a press briefing where the information was released.
Bulk commodity prices will likely continue to stay at a low level, which will help lower China imports costs and boost the competitiveness of Chinese exports, Mr. Zheng added.
–Yajun Zhang contributed to this article.
China Export Data Suggest West’s Recovery Remains Tepid
Export Growth Weakens in December, Highlighting Challenges
China Export Data Suggest West’s Recovery Remains Tepid - Wall Street Journal - WSJ.com
China's export growth weakened in December, casting doubt on a hoped-for recovery in demand from the U.S. and Europe.
By Richard Silk
In this Dec. 10, 2013, photo, trucks carry containers that were unloaded from a ship at a port in Qingdao, in eastern China's Shandong province.
Associated Press
BEIJING—China’s export growth weakened in December, casting doubt on a hoped-for recovery in demand from the U.S. and Europe.
Exports in December were up just 4.3% compared with the same month a year earlier, down from a much stronger 12.7% year-over-year rise in November, according to customs data released on Friday.
China’s traditionally important export sector faces a range of challenges, from higher labor and land costs to an appreciating currency that eats into its competitiveness..
As the U.S. and Europe regain economic momentum, experts expect China to benefit from better export demand. But the slow pace of improvement in December was a letdown for many.
“The lift from developed markets has not been as strong as expected,” said Junwei Sun, an economist at HSBC Holdings PLC. “This year might be a better year [for exporters], but the pace of improvement could be very modest.”
The poor export growth may in part be due to more than trade flows. China’s State Administration of Foreign Exchange said in December it was tightening supervision of trade financing to stop speculative “hot money” flows from being disguised as trade. That likely dragged down an already weak growth number, Ms. Sun said Friday.
Official data showed a jump in December 2012 that many economists attributed to capital flows misreported as trade.
By contrast, the latest import figures were strong, beating forecasts with an 8.3% year-over-year rise in December, up from 5.3% in November. They were boosted by high raw-material shipments. China brought in 6.33 million barrels a day of crude oil in December, a record, and copper, iron ore and plastic imports were up strongly, too. That could indicate that companies are building up inventories again after running them down earlier in the year, said Shuang Ding, an economist at Citigroup, but he cautioned that the trend may not last long.
“I don’t think this represents a sustained restocking across the economy,” he said. “Domestic demand remains quite sluggish.”
Still, strong imports meant that the country’s trade surplus—the difference between exports and imports—narrowed to $25.6 billion, from $33.8 billion the previous month. The decline relieves a source of potential tension with the U.S., where some politicians worry that China keeps its currency too cheap, benefiting its exporters but hitting China’s potential as a market for U.S. goods.
Exports totaled $2.21 trillion for the year as a whole, up 7.9% from 2012, while imports rose 7.3% to $1.95 trillion. Total trade grew 7.6% in 2013, narrowly missing the official target of 8% trade growth.
China’s Customs Administration predicts that the country’s trade will improve compared with 2013 as demand from the West improves.
“China’s foreign trade will continue to grow steadily as long as there are no unexpected global or domestic events this year,” said customs spokesman Zheng Yuesheng at a press briefing where the information was released.
Bulk commodity prices will likely continue to stay at a low level, which will help lower China imports costs and boost the competitiveness of Chinese exports, Mr. Zheng added.
–Yajun Zhang contributed to this article.
