China’s exports fell for a second month last month as the global crisis gnawed further into the country’s trade-dependent economy, the government said yesterday, jeopardizing millions more jobs.
Last month also left the Asian giant with its second-largest trade surplus ever, but it was not a sign of health, as it merely reflected an even sharper drop in imports, customs figures showed.
Exports from the world’s fourth-largest economy dropped 2.8 percent last month compared with a year earlier to US$111.2 billion.
It was the biggest fall in a decade, economists said, and highlighted what is becoming an increasingly worrying problem for the Chinese Communist Party as they watch a huge engine of employment slow sharply.
“Millions and millions of manufacturing workers are losing their jobs,” said Chen Xingdong (陳興動), Beijing-based chief China economist for BNP Paribas. “It’s a big challenge.”
The export decline last month followed a fall of 2.2 percent in November, which was the first time in seven years that Chinese exports had shrunk at all, and some observers said the government data was inaccurate.
“The real situation is probably worse than the statistics indicate. That’s what I see on the ground,” said Andy Xie (謝國忠) , an independent economist based in Shanghai.
Some companies are reporting 20 percent drops in exports, especially in the household appliances sector, he said.
The reason why this is not reflected in the overall official trade figures is that many enterprises exaggerate how much they sell to foreign customers so they can benefit from tax incentives for exporters, he said.
The slowdown in exports has hit thousands of companies along China’s eastern seaboard, often set up with investment from abroad.
A significant number are likely to close down their operations during the Lunar New Year at the end of the month, using a time when workers are away on holiday to avoid the hassle of dealing with angry labor, analysts said.
Imports last month were down by 21.3 percent to US$72.2 billion, customs said, suggesting a rapid contraction in domestic economic activity.
The World Bank has warned that China’s economy would expand by just 7.5 percent this year, the lowest level since 1990.
The most spectacular result of China’s steep drop in imports was a trade surplus. which last month came to US$39 billion, customs data showed.
This was only surpassed by the US$40.1 billion in November, which had also resulted mainly from a steep decline in imports.
The figure suggests that China’s full-year trade surplus was US$295 billion, up about 13 percent from 2007, rising to a level comparable to the entire economies of Iran or South Africa.