China’s trade activity fell last month from a year earlier, data showed yesterday, as a domestic slowdown, overseas turmoil and factory closures during the Lunar New Year holiday hit demand.
Exports fell 0.5 percent year-on-year last month to US$149.94 billion, while imports plunged 15.3 percent to US$122.66 billion, customs officials said in a statement, marking the worst trade data since 2009 during the global financial crisis.
China’s politically sensitive trade surplus — a constant bugbear for its major trade partners — widened to US$27.28 billion last month from US$16.52 billion the previous month, the statement said.
Photo: AFP
Analysts have cautioned that the data for last month is distorted by the earlier-than-usual Lunar New Year holiday.
Many of China’s factories and businesses cut back production or close their doors during the holiday so employees can travel home to celebrate the most important festival in the Chinese calendar with their families.
Even so, analysts said the latest trade figures added to mounting evidence that the world’s second-largest economy was slowing as the eurozone crisis and weakness in the US hurt demand for Chinese products.
The double-digit fall in imports also reflected “extremely weak domestic demand as investment slumps,” said Alistair Thornton, a Beijing-based analyst at IHS Global Insight.
Seasonally adjusted figures show exports and imports rose 10.3 percent and 1.5 percent year on year, respectively, which still marks a sharp slowdown from December when exports rose 13.4 percent and imports were up 11.8 percent.
Chinese shares closed up 0.1 percent, or 2.39 points, at 2,351.98 yesterday.
Bank of America-Merrill Lynch economist Lu Ting (陸挺) said the European sovereign debt crisis posed the biggest threat to the Chinese economy this year and would be a “major drag” on growth as consumers cut back on spending.
The IMF this week warned that an escalation of Europe’s fiscal woes could slash China’s economic growth by half this year, and it urged Beijing to prepare stimulus measures in response.
In the IMF’s “downside scenario,” China’s growth would fall by about 4 percentage points this year from the 8.2 percent rate it projected last month.
However, Chinese leaders have been cautious about opening the credit valves for fear of reigniting inflation.
Late last year the central bank eased lending restrictions on banks and analysts expect similar moves this year as authorities try to spur economic activity and prevent a collapse in the property market.
Policymakers are also easing taxes and improving funding channels for small and medium-sized businesses which are huge employers, but are often shunned by the major banks.
Chinese Minister of Commerce Chen Deming (陳德銘) said on Thursday that smaller businesses were “under growing pressure” and the government planned to adopt a number of measures to help them overcome their current difficulties.
“Should there be any fine-tuning, it will be supportive rather than discouraging,” Chen said, echoing comments made by Chinese Premier Wen Jiabao (溫家寶) last weekend.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San