Chinese Exports Grow, but Imports Show Signs of Weakening

BEIJING — Exports from China rose 13.4 percent in December compared with a year ago, while import growth unexpectedly slowed to 11.8 percent because of lower prices and moderating domestic demand, government data released Tuesday showed.

Overall, the Chinese trade surplus shrank to $155 billion in 2011, from $183 billion in 2010, as imports picked up and demand for Chinese goods in Europe and elsewhere softened. IHS Global Insight, an economic forecasting firm, said that while still sizable, the surplus was China’s lowest in three years. That could help China fend off pressure from the United States to allow its currency to appreciate faster.

The trade figures were released just before the arrival of Treasury Secretary Timothy F. Geithner in Beijing. Mr. Geithner is hoping to persuade China to limit its purchases of Iranian oil to back up a recent strengthening of economic sanctions by major Western powers in reaction to new evidence that Iran plans to build nuclear weapons.

Mr. Geithner, who will also stop in Tokyo, is also expected to discuss currency disputes and escalating trade frictions between China and the United States. Last month, China imposed new duties on imports of cars and other vehicles from the United States, while the United States is investigating whether to impose extra fees on Chinese-made solar panels. American producers have alleged that government-subsidized Chinese companies are selling solar panels at below cost, damaging the domestic industry in the United States.

While it stopped short of accusing China of manipulating its currency, the Treasury Department said last month that the United States would continue to push China to let the renminbi strengthen against the dollar. The United States argues that despite steady appreciation, the renminbi remains substantially undervalued, which bolsters Chinese exports and makes American goods in China more expensive.

After adjusting for inflation, the renminbi appreciated 12 percent against the dollar in the last 18 months, the Treasury Department said. Some analysts predict that China will allow the renminbi to climb by another 3 percent against the dollar this coming year.

Despite concerns in China about the slowing pace of economic growth, “the Chinese economy remains on track for a soft landing,” Barclays Capital analysts said. They predicted that China’s exports will grow 10 percent this year — less than half of last year’s increase. They estimated that imports will increase 13 percent, down from 24.9 percent growth in 2011.

December’s export growth was only slightly behind that of the previous month, when exports rose 13.8 percent compared with the same period a year ago.

But last month’s import growth of 11.8 percent represented a slowdown compared with the prior three months. Import growth had been steadily outpacing export growth for months, hitting 20.9 percent in September, 28.7 percent in October and 22.1 percent in November.

Analysts with IHS Global Insight called the decline in import growth “worrying,” and an indication of rapidly falling domestic demand. “This will be of little help to a flagging global economy,” they said.

But Goldman Sachs noted that trade data is notoriously volatile and attributed much of the slowdown to lower prices, not fewer purchases. Barclays Capital also cited lower commodity prices, saying that domestic demand, while moderating, remained “robust.”

Export growth held up well because of looser monetary conditions and continued demand for Chinese goods, analysts with ANZ said. “While exports to the United States moderated, shipments to Japan and the emerging economies remained reasonably steady,” they said in a research note.

Article source: http://www.nytimes.com/2012/01/10/business/chinese-exports-grow-but-imports-show-signs-of-weakening.html?partner=rss&emc=rss