China trade surplus rebounds in January

Wednesday 12 February 2014 09.26
China's trade surplus rose 14% year-on-year in January to $31.86 billion
China's trade surplus rose 14% year-on-year in January to $31.86 billion

China's trade surplus surged in January, according to data today which showed that exports strengthened markedly in a potentially brighter note for the world's second-biggest economy after recent disappointments.

However, some economists suggested the numbers could be distorted.

China's trade surplus rose 14% year-on-year in January to $31.86 billion, the General Administration of Customs said, rebounding from a decline the previous month.

Exports jumped more than expected, increasing 10.6% to $207.13 billion, while imports were up 10% at $175.27 billion.

Forecasts had pencilled in only a 0.1% increase in exports, which had risen 4.3% in December. In that month, the overall trade surplus fell 17.4% year-on-year to $25.64 billion.

The strong results surprised economists, with some suggesting they were driven by disguised capital flows instead of real demand.

Analysts have long taken Chinese economic statistics with more than a grain of salt.

China's annual trade in goods passed the $4 trillion mark for the first time in 2013, when the country probably surpassed the US as the world's largest physical trading nation.

But recent signals for the economy have been mixed. China's official purchasing managers' index (PMI), a gauge of its manufacturing sector, slipped to a five-month low in January, confirming a slowdown in factory activity.

British bank HSBC, meanwhile, announced that China's manufacturing sector shrank in January for the first time in six months, with its PMI index recording 49.5, placing it in contraction territory.

January's trade and manufacturing results came after China's economy registered flat growth of 7.7% in 2013, maintaining its slowest expansion in more than a decade.

Gross domestic product (GDP) expansion for the three months from October to December also came in at 7.7%, the National Bureau of Statistics said last month, slowing from 7.8% in the previous three months.

The 2013 GDP figure was the same as that for 2012 - which was the worst rate of growth since 1999 - although it exceeded the government's growth target for the year, which was declared as 7.5%. China's economy is expected to slow to 7.5%, economists predict.

China is a key driver of the global economy but is widely seen as facing slower expansion in the years ahead.
Its leaders have vowed to change its growth model so that consumers and other private actors play the leading role, rather than huge and often wasteful state investment.