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JANUARY 11, 2010
China's Exports Turn Upward in December
Jump of 18% Marks the End of More Than a Year of Declines; Imports Also Soar, Fueled by the Country's Stimulus Programs
By J.R. WU
BEIJING -- Exports from China turned upward in December, resuming growth after 13 months of declines, in the latest sign of improvement in global trade.
View Full Image
Agence France-Presse/Getty Images
Chinese workers prepare for their shift at the Yangshan container port in Shanghai, in June. China's exports surged in December, ending 13 months of declines. Imports soared 56%.
The change of direction came a year after Chinese leaders embarked on a massive domestic investment-led stimulus program to offset the global erosion of demand for its exports, a key driver of China's economic growth.
The shift in focus was evident in December's trade data: While exports appeared to have turned the corner, rising 18% from the year-earlier month, imports grew even more, up 56%, reflecting China's stimulus-fueled appetite for raw materials. Crude-oil imports set a monthly record, and those of iron ore were the second-highest recorded.
This trend also showed in the annual trade surplus, which shrank for the first time in six years.
More
China Dethrones Germany as Top Exporter For the year, exports fell 16% to $1.202 trillion and imports slid 11.2% to $1.006 trillion, data issued Sunday by the General Administration of Customs showed. It was China's first annual export decline since 1983, when exports fell a mere 0.4%. While the rest of the world took even harder hits from the global slowdown, the effects of the crisis have marked Chinese leaders' thinking about accelerating the economy's drivers away from exports and toward domestic consumption.
Still, the sharp December trade improvement in China -- which overtook Germany last year as the world's largest exporter -- suggests a strong expansion in China's economy in the final quarter of 2009, after the 8.9% expansion in the third quarter, and is likely to stoke debate about when Beijing will start to wind down its stimulus policies.
"Growth in exports is expected to be strong in the coming months due to steady improvement in external demand combined with low base effects. Continued recovery in China's industrial sector should support increased demand for energy and raw material imports," said Jing Ulrich, chairman of China equities and commodities at J.P. Morgan.
Economists said a continued rise in exports might increase the government's willingness to let its currency rise in the coming months. Critics say Chinese exporters enjoy an unfair advantage in global markets because the yuan is undervalued, and trade tensions between China and its key trading partners have escalated in recent months.
"Positive export growth will ... likely increase the global pressure on Beijing to allow some currency appreciation, while also making it easier to justify such a move to domestic audiences," said Royal Bank of Canada Capital Markets senior strategist Brian Jackson.
China's December exports surged to $130.7 billion as imports grew to $112.3 billion, resulting in a trade surplus for the month of $18.4 billion, customs data showed.
Economists polled by Dow Jones Newswires had expected exports to grow 5% and imports to increase 31% in December. China's exports last grew on a year-on-year basis in October 2008 before the global financial crisis sharply eroded demand at the tail end of 2008.
China's trade surplus last year topped $196 billion, falling 34% for the year and recording its first annual drop since it fell 16% in 2003.
In the fourth quarter, China's trade surplus totaled about $61 billion, greater than the roughly $39 billion of the third quarter, likely bolstering China's foreign exchange reserves and its money supply into the end of the year. China's central bank is due to issue the reserves and lending data early this week.
China's crude oil imports hit a record 21.26 million metric tons in December, equivalent to 5.03 million barrels a day, the data showed, partly on a push by state-owned refiners to have enough fuel in reserve ahead of the Lunar New Year holiday next month.
For all of last year, crude oil imports rose 14% to 203.79 million tons, likely cementing China's place as the second-largest importer of crude oil after the U.S. in 2009, overtaking Japan, whose oil demand stagnated when its economy slid into recession.
China's commodity imports trumped expectations of a winter slowdown, underscoring an unabated hunger for key industrial products.
China imported 62.16 million metric tons of iron ore in December, 80% more than a year earlier and the second highest volume on record, the data showed. Iron ore imports were up 22% from the month before.
For the full year of 2009, China imported 627.78 million tons of iron ore, up 42% from 2008.
The high import volume points to traders and steelmakers moving to stock up on the steelmaking ingredient, ahead of market expectations that annually-set benchmark prices are poised to rise some 20%.
For the year, China's trade with the European Union, its top trading partner, fell 14.5% to $364 billion as exports to the EU slumped 19% to $236 billion. China's trade with the U.S., its second largest trading partner, sank 11% to $298 billion as exports fell 12.5% to $221 billion.
China's Exports Turn Upward in December - WSJ.com
China's Exports Turn Upward in December
Jump of 18% Marks the End of More Than a Year of Declines; Imports Also Soar, Fueled by the Country's Stimulus Programs
By J.R. WU
BEIJING -- Exports from China turned upward in December, resuming growth after 13 months of declines, in the latest sign of improvement in global trade.
View Full Image
Agence France-Presse/Getty Images
Chinese workers prepare for their shift at the Yangshan container port in Shanghai, in June. China's exports surged in December, ending 13 months of declines. Imports soared 56%.
The change of direction came a year after Chinese leaders embarked on a massive domestic investment-led stimulus program to offset the global erosion of demand for its exports, a key driver of China's economic growth.
The shift in focus was evident in December's trade data: While exports appeared to have turned the corner, rising 18% from the year-earlier month, imports grew even more, up 56%, reflecting China's stimulus-fueled appetite for raw materials. Crude-oil imports set a monthly record, and those of iron ore were the second-highest recorded.
This trend also showed in the annual trade surplus, which shrank for the first time in six years.
More
China Dethrones Germany as Top Exporter For the year, exports fell 16% to $1.202 trillion and imports slid 11.2% to $1.006 trillion, data issued Sunday by the General Administration of Customs showed. It was China's first annual export decline since 1983, when exports fell a mere 0.4%. While the rest of the world took even harder hits from the global slowdown, the effects of the crisis have marked Chinese leaders' thinking about accelerating the economy's drivers away from exports and toward domestic consumption.
Still, the sharp December trade improvement in China -- which overtook Germany last year as the world's largest exporter -- suggests a strong expansion in China's economy in the final quarter of 2009, after the 8.9% expansion in the third quarter, and is likely to stoke debate about when Beijing will start to wind down its stimulus policies.
"Growth in exports is expected to be strong in the coming months due to steady improvement in external demand combined with low base effects. Continued recovery in China's industrial sector should support increased demand for energy and raw material imports," said Jing Ulrich, chairman of China equities and commodities at J.P. Morgan.
Economists said a continued rise in exports might increase the government's willingness to let its currency rise in the coming months. Critics say Chinese exporters enjoy an unfair advantage in global markets because the yuan is undervalued, and trade tensions between China and its key trading partners have escalated in recent months.
"Positive export growth will ... likely increase the global pressure on Beijing to allow some currency appreciation, while also making it easier to justify such a move to domestic audiences," said Royal Bank of Canada Capital Markets senior strategist Brian Jackson.
China's December exports surged to $130.7 billion as imports grew to $112.3 billion, resulting in a trade surplus for the month of $18.4 billion, customs data showed.
Economists polled by Dow Jones Newswires had expected exports to grow 5% and imports to increase 31% in December. China's exports last grew on a year-on-year basis in October 2008 before the global financial crisis sharply eroded demand at the tail end of 2008.
China's trade surplus last year topped $196 billion, falling 34% for the year and recording its first annual drop since it fell 16% in 2003.
In the fourth quarter, China's trade surplus totaled about $61 billion, greater than the roughly $39 billion of the third quarter, likely bolstering China's foreign exchange reserves and its money supply into the end of the year. China's central bank is due to issue the reserves and lending data early this week.
China's crude oil imports hit a record 21.26 million metric tons in December, equivalent to 5.03 million barrels a day, the data showed, partly on a push by state-owned refiners to have enough fuel in reserve ahead of the Lunar New Year holiday next month.
For all of last year, crude oil imports rose 14% to 203.79 million tons, likely cementing China's place as the second-largest importer of crude oil after the U.S. in 2009, overtaking Japan, whose oil demand stagnated when its economy slid into recession.
China's commodity imports trumped expectations of a winter slowdown, underscoring an unabated hunger for key industrial products.
China imported 62.16 million metric tons of iron ore in December, 80% more than a year earlier and the second highest volume on record, the data showed. Iron ore imports were up 22% from the month before.
For the full year of 2009, China imported 627.78 million tons of iron ore, up 42% from 2008.
The high import volume points to traders and steelmakers moving to stock up on the steelmaking ingredient, ahead of market expectations that annually-set benchmark prices are poised to rise some 20%.
For the year, China's trade with the European Union, its top trading partner, fell 14.5% to $364 billion as exports to the EU slumped 19% to $236 billion. China's trade with the U.S., its second largest trading partner, sank 11% to $298 billion as exports fell 12.5% to $221 billion.
China's Exports Turn Upward in December - WSJ.com
