China Dec exports rise 2.3% in yuan terms

Beijing’s efforts to boost trade somewhat paid off in December.

Exports in December fell 1.4 percent from a year earlier, data from the General Administration of Customs showed on Wednesday, much less than a Reuters poll forecast for an 8 percent drop and moderating from November’s 6.8 percent decline.

Comparing with more import of fruit and vegetable from Thailand to China mainland, export of fruit and vegetable from China mainland to Thailand also increased, but trade deficit becomes bigger.

Beijing said in 2013 that some data on trade with Hong Kong were inflated by arbitrage transactions meant to avoid rules, an acknowledgment that export and import figures were overstated. Chinese GDP growth in 2015 should therefore be the weakest performance of the country for a quarter century.

However, economists said there had been little evidence that the country’s economic conditions deteriorated sharply in recent weeks and the government’s support, through fiscal and infrastructure measures and accelerated structural reforms, would help unlock new sources of growth this year.

The situation got worse in July when exports plunged 8.3%, leading to the surprise devaluation in yuan of about 2% in August, in order to maintain competitiveness of the currency in global markets.

In 2012 China imported 14% of its oil from Angola, according to data from the Observatory of Economic Complexity.

While little notice is taken of China’s official unemployment rate, which remained unchanged at 5.1 per cent for most of past year, job creation is often cited by government officials as the most important of China’s economic indicators.

Last year, the country’s total export and import values decreased seven per cent year on year to 24.59 trillion yuan as the economy slowed down. The improvement in December’s number compared to the prior month is encouraging, and shows domestic demand in China is picking up pace.

“Demand may not be a big driver”, said Standard Chartered Bank economist Ding Shuang.

One expert, Kamel Mellahi, Professor of Strategic Management at Warwick Business School, says the pick-up in exports is due largely to the devaluation of the yuan.

United States trade figures will not be released until February, but for the first 11 months of the year it amounted to 3.48 trillion on a total balance of payments basis, according to figures from the USA census bureau.

While the International Monetary Fund recently said that China’s currency was fairly valued, China’s large annual surplus could become a USA political issue this year, particularly if Republican presidential candidate Donald Trump does well, economists said.

The common view is that despite the stock market turmoil and various interventions in the currency markets, China’s slowdown is being managed: it is a restructure, rather than the chaos often depicted in mainstream media.