China’s export sales contracted 15 percent last month, while import shipments fell at their sharpest rate since the 2009 global financial crisis, a shock outcome that deepens concern about sputtering Chinese economic growth.
The tumble in exports — the worst in about a year — compared with expectations for a 12 percent rise and could heighten worries about how a rising yuan has hurt demand for Chinese goods and services abroad, analysts said.
In a sign that domestic demand was also tepid, imports into the world’s No. 2 economy shrunk 12.7 percent last month from a year ago, the Chinese General Administration of Customs said yesterday.
That was the biggest slump in imports since May 2009 and compared with a Reuters poll forecast for a 11.7 percent drop.
“It’s a very bad number that was much worse than expectations,” Louis Kuijs, an economist at RBS in Hong Kong, said in reference to the export data.
“It leads to warning flags both on global demand and China’s competitiveness,” he said.
Buffeted by lukewarm foreign and domestic demand, China’s trade sector has wobbled in the past year on the back of the country’s cooling economy, unsettling policymakers.
Chinese Vice Premier Wang Yang (汪洋) was quoted by Xinhua news agency as saying earlier this month that authorities must act to arrest China’s export slowdown lest it further dampens economic growth.
Wang said that local governments should offer “preferential policy support” and encourage more private investment in exports.
Anemic growth in the trade sector could hurt jobs, which the government wants to protect for fear that widespread unemployment could fuel social discontent and trigger unrest.
So far, China’s labor market appears to be holding up well, despite signs that economic growth is steadily grinding to its lowest in a quarter of a century of about 7 percent.
Last month’s trade performance left China with a surplus of US$3.1 billion, much smaller than the poll forecast for a US$45.4 billion trade gap.
A breakdown of exports and imports by major markets was not yet available yesterday, though many economists said there were few doubts that a stronger yuan — which is pegged to a rising US dollar — had crimped export sales.
Huang Songping, a spokesman at China’s customs office, acknowledged the difficulties that exporters faced from a firmer yuan.
Costs stemming from labor, financing and the exchange rate “remain stubbornly high and the competitive advantage of the traditional foreign trade has been weakened,” Huang said.
He added that 56.2 percent of exporters surveyed by the government said their costs had risen last month.
Against the euro, for instance, the yuan hit a record high of 0.15274 euros on March 16, up a steep 14 percent against the common currency this year.
“The really weak trade surplus has implications for the weakness in the renminbi [yuan],” said Andrew Polk, an economist at the Conference Board in Beijing. “So we might see more weakness going forward.”
China expanded grew its trade sector by 3.4 percent last year, according to government data, missing the government’s growth target of 7.5 percent by more than half.
Taking that disappointing outcome into account, the government has lowered its growth target for this year’s combined imports and exports to about 6 percent.
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