China Trade Rebounds in Sign of Economic Recovery

By Joe Mc Donald 10 January 2013

BEIJING — China’s trade growth rebounded strongly in December in a positive sign for the recovery of the world’s second-largest economy.

Export growth more than quadrupled from the previous month to 14.1 percent while imports—which failed to grow at all in November—rose 6 percent in a sign of increasing domestic demand, data showed Thursday.

The trade figures add to evidence China is gradually emerging from its worst economic downturn since the 2008 global crisis. Factory output and other activity improved in the final quarter of 2012, but analysts say a recovery still is shaky and will be too weak to drive a global rebound without a turnaround in the United States and Europe.

The improvement comes as a new generation of Communist Party leaders who were installed at a congress in October are taking power.

Beijing is pinning hopes for recovery on government-driven investment and domestic consumer spending that is rising but not as fast as authorities want.

Private sector analysts, the World Bank and other forecasters expect growth of about 8 percent in 2012 and about 7.5 percent this year. That is far stronger than the West and Japan but would be China’s weakest performance since the 1990s.

The country’s global trade surplus nearly doubled over the same month in 2011, rising 90 percent to $231.1 billion, according to the General Administration of Customs. For the full year, the global trade surplus rose 49 percent to $231.1 billion.

In November, export growth had plunged to 2.9 percent while imports were flat. That was in line with analysts’ warnings that a trade rebound that started in August was unsustainable due to weak European and US demand.

Reliance on trade has declined as domestic consumption growth but export-driven manufacturing still employs millions of workers and any weakness raises the risk of job losses and unrest. The commerce minister, Chen Deming, warned in November that exporters face “relatively grim” conditions in coming months and “many difficulties” in 2013.

Import growth has been depressed by government curbs aimed at cooling a boom in construction and industrial investment that have cooled demand for foreign iron ore, copper and other raw materials.

Communist leaders want to shift the basis of economic growth to domestic consumption and services, a strategy that promises smaller but more sustainable gains. That could hurt commodities suppliers such as Australia, Brazil and some African economies, where Chinese spending has fueled an economic boom.