China’s trade surplus shrank last year as import and export growth slowed sharply, official data showed yesterday, after domestic tightening measures and global economic turmoil hit consumption.
The figures add to mounting evidence the economy is slowing and will ratchet up pressure on Beijing to further loosen policies to prevent the world’s second-largest economy from suffering a painful hard landing.
Last year’s trade surplus — flagged by Chinese Minister of Commerce Chen Deming (陳德銘) last week — narrowed to US$155.14 billion from US$181.51 billion in 2010, the customs agency said in a statement, reflecting the turmoil in Europe and the US.
Exports rose 20.3 percent to US$1.899 trillion last year, compared with an increase of 31.3 percent in the previous year, while imports rose 24.9 percent to US$1.743 trillion, much slower than the 38.8 percent growth in 2010.
Analysts expected export growth to halve this year from last year as European woes and a sluggish US economy drag Chinese economic expansion below 9 percent for the first time in more than a decade.
Weakening demand for exports will “provide further drag on the Chinese economy at least through the first half of the year,” IHS Global Insight analysts Alistair Thornton and Ren Xianfang (任現芳) said.
Moody’s economist Alaistair Chan (陳志雄) said the slowdown in imports would push policymakers to cut the reserve requirement ratio several times in the first half of the year to spur lending.
GDP growth could ease to 8.5 percent this year, a senior government researcher said last month, which would be the slowest pace since 2001 when the economy expanded 8.3 percent.
However, it would still be within the official annual target of 7 to 8 percent, a level that is seen as necessary to create enough jobs to keep a lid on social unrest in the country of more than 1.3 billion people.
Despite the grim outlook, Beijing is likely to remain under pressure for a stronger currency — a constant bugbear for China’s trade partners who argue the yuan is too cheap and gives domestic exporters an unfair trade advantage.
The US Treasury said last month that the yuan is still significantly undervalued, although it refrained from saying Beijing manipulates the currency, which could lead to retaliatory action by Congress.
Other data released by customs showed last month’s trade surplus widened to US$16.52 billion from US$14.5 billion in November, while year-on-year growth in exports and imports slowed.
Exports rose 13.4 percent to US$174.72 billion, compared with a rise of 13.8 percent in November. The figure suggested overseas demand was softening, but “has not collapsed,” IHS Global Insight said.
Imports increased 11.8 percent to US$158.2 billion compared with a 22.1 percent rise in the previous month, signaling that tight restrictions on bank lending and the property market had hurt domestic consumption.