China trade has suffered its biggest decline in January since the 2008 financial crisis – a new sign of weak global demand and a slowing domestic economy, according to the Guardian UK, citing an Associated Press report.
Exports fell 0.5 percent from a year earlier to USD$149.9 billion while imports were down 15 percent at $122.7 billion, customs data showed on Friday. China’s politically sensitive global trade surplus tripled compared with a year earlier to $27.3 billion.
Analysts expected January trade to fall due to the Lunar New Year holiday, the country’s most important holiday. Chinese exporters rushed out orders in December and then shut down for two weeks or more in January.
But the import decline was sharper than expected, suggesting that even with the holiday factored in, the world’s second-largest economy is slowing markedly. China is a major buyer of iron ore, oil and other commodities and industrial components, meaning any downturn could hurt suppliers such as Australia, Brazil and South Africa.
Concerns about the state of the global economy are intensifying – this week the Baltic Dry Index, a proxy for for the strength of world trade, fell to a 25-year-low.
“Such a dramatically low import number reflects extremely weak domestic demand, as investment slumps and drags on economic activity,” said IHS Global Insight analyst Alistair Thornton in a report.
The Lunar New Year falls at different times during January or February each year, distorting trade figures. Analysts usually group the two months together and have said they will not have a clear picture until March.
China’s export growth has declined steadily as Europe’s debt problems and high US unemployment hurt demand for goods. But January was the first outright contraction compared with a year earlier since the 2008 crisis.
More at Guardian
