China trade surplus shrinks, imports surge
BEIJING.
CHINA’S trade surplus fell more than expected in January after imports surged, supporting the government’s case that it is doing enough to spur domestic demand without speeding up currency appreciation.
A weaker surplus in the past would have caused concern, but China has been trying to shift its economy towards greater reliance on consumption and less on exports, in part to address critics who say that its success has come at the expense of other countries.
It was the third consecutive month of declining trade inflows, and though not enough to mark a definitive change, that streak provides an important symbolic lift to China ahead of a G20 meeting this week of finance ministers from the world’s biggest developed and developing economies.
“There tends to be a seasonal pattern and there is generally a decline in the trade surplus at the beginning of the year,” said Jian Chang, an economist with Barclays Capital in Hong Kong. Exports tend to be weak in the first quarter, while there is no such pattern in imports.”
China imports rose 51 percent in January from a year earlier, blowing past forecasts for a 28 percent rise. Exports rose 37,7 percent in January, topping expectations for a 22,4 percent rise, the customs administration said. That left the country with a trade surplus of US$6,5 billion, compared with US$13,1 billion in December and forecasts for a US$10,7 billion gap. The surplus was its smallest in nine months.
Yu Song and Helen Qiao, economists at Goldman Sachs, said that the surprising growth of imports and exports reflected well on both the Chinese and global economy.
“The strong exports growth momentum is supported by improvements in economic conditions in China’s major trading partners, and strong imports growth momentum is supported by strong domestic demand growth,” they wrote in a note.
“Besides, the rise in imported commodity prices likely contributed to strong imports data as well.” Along with serving as a signal of economic rebalancing, the smaller trade surplus also means that less money is rushing into China, easing the upward pressure on prices that has pushed inflation to its fastest rate in more than two years.
China will report its January inflation data today. Analysts polled by Reuters had expected prices to rise 5,3 percent in the year to January, a 30-month high.
Traders, however, said that the increase was likely to be 4,9 percent, because adjustments of the consumer price index will have reduced the weight given to fast-rising food prices. — Reuters.
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