Chinese Exports Rebound Strongly


Chinese exports expanded for the first time in over a year, while the country's imports bill rocketed on higher demand for crude oil and other commodities in December, strengthening the case for policy tightening and resumption of a yuan appreciation, analysts said.

Data released over the weekend showed mainland China's exports rose 17.7% in December from the year-earlier month, trouncing the 4% rise expected by economists in a Reuters survey and marking a sharp rebound from the 1.2% fall in November.

At the same time, imports vaulted 55.9% during the month, also comfortably beating the 31% jump estimated by economists. The surge helped narrow China's December trade surplus to $18.43 billion from $19.1 billion in November.

Chinese authorities have held the exchange rate steady at about 6.83 yuan to a U.S. dollar in the wake of the global economic downturn, in order to protect the nation's exporters and the millions of jobs that they provide.

Government officials have also repeatedly said they prefer a moderately loose monetary policy and low interest rates to aid the country's economic recovery.

While much of the focus for the December data was on exports, which expanded for the first time since October 2008, some analysts said imports were also likely to continue their improvement.

The jump in China's December imports was led by crude-oil shipments, which surged to a record monthly high of 21.26 million tons in December, topping 5 million barrels a day, according to reports.

Iron-ore imports also jumped, rising to 62.16 million metric tons for an increase of more than 80% from the year-earlier level, as compared to a 22% growth in November.

China overtook Germany in 2009 to become the world's top exporting nation, another milestone in China's rapid rise and growing economic influence. But in a year of global economic turmoil and weakness, China achieved the top ranking because its exports fell only 16 percent, while Germany's exports fell more steeply.

 


TradingEconomics.com, MarketWatch
1/11/2010 9:57:01 AM