China’s exports surged more than expected last month in a possible sign of stronger global demand.
Exports leaped 21.8 percent, well ahead of analysts’ expectations of single-digit growth as companies shut down for the Lunar New Year holiday, data showed yesterday.
However, imports fell 15.2 percent last month, after growing 28 percent in January. That suggested domestic demand might be weakening, but the picture is clouded by the Lunar New Year holiday, when companies shut down for up to two weeks.
“We are impressed by China’s ability to expand its exports so strongly despite a muted external environment,” Credit Agricole CIB economist Dariusz Kowalczyk said in a report.
China’s trade growth has been rebounding in recent months in a sign of recovery in the world’s second-biggest economy.
Economic growth rebounded in the final quarter of last year from a three-year low. The latest trade data might help to reassure analysts who say China’s recovery is still shaky and will be too weak to drive a global rebound without a revival in the US and Europe.
Trade data for January and last month are complicated by the Lunar New Year, which falls at different times in those two months each year. For the combined January-February period, exports rose 23.6 percent compared with the same period last year, while imports grew 5 percent.
Last month’s import decline was also probably caused by falling prices for shipments coming into China rather than stalling demand, Kowalczyk said.
Exports rose to US$139.4 billion, while imports declined to US$124.12 billion, resulting in a global trade surplus of US$15.2 billion, compared with a trade deficit of US$32 billion in the same month last year.
China usually runs a global trade deficit for at least one month early in the year as factories restock following the holiday shutdown.
In related news, Chinese Minister of Commerce Chen Deming (陳德銘) yesterday appealed to other major governments to avoid suppressing the value of their currencies to boost exports, warning that could hurt global growth.
Chen was responding to a question at a news conference about the yen’s weakness, but said his appeal was also directed at the US and Europe.
The yen has fallen by about 20 percent against the US dollar since the middle of last year, prompting concern other governments might respond by driving down their currencies to keep exports competitive.
“I’m worried that ‘competitive devaluation’ will lead to oversupply of money and it will have a negative effect on global economic growth,” Chen said.
Japanese Prime Minister Shinzo Abe has called publicly for a weaker yen to help exporters compete. His government has not directly intervened in currency markets, but its policies have convinced traders it will create new money, eroding the Japanese currency’s value.
Several developing economies have also criticized the US Federal Reserve’s bond-buying program for pushing up the value of their currencies relative to the US dollar.
G20 finance officials issued a joint pledge on Feb. 17 in Moscow to “refrain from competitive devaluation.”
Chen appealed to other governments to stick to their anti-devaluation pledge.
“If there were a huge devaluation of those major currencies, it would deliver a huge shock to developing countries by depressing our exports,” he said.