Why China’s unexpected export, import growth is a good sign for others
China vaulted past Germany to become the world’s biggest exporter last month as its export, import volume jumped by 18 and 56 percent. The increases are a positive sign for global trade, especially for countries that sell to China.
China’s surprisingly strong export and import performance in December offers further evidence of a global trade pickup, experts here say.
China’s December exports rose 18 percent from a year earlier, after dropping for 13 straight months, according to Customs figures. Imports rose even more sharply, by 56 percent.
That is good news for exporters of the sort of raw materials that China is devouring as its economic growth continues to outpace the rest of the world.
Australia, which sells the Chinese steel industry much of its iron ore, saw its exports to Beijing double in December. Chinese iron ore imports notched up their second-ever highest monthly total, and crude oil imports hit a monthly record.
The figures were also encouraging for manufacturers of the machinery that Chinese firms are buying as they channel government stimulus money into investment. Japan, Germany, South Korea, and other Asian countries such as Thailand stand to benefit from China’s buying spree.
“It seems very clear that what we are seeing are basically imports of raw materials and capital goods,” says Arthur Kroeber, head of Dragonomics, a Beijing-based economics research firm. “These are all investment-related.
“There is no sign that China is taking over from the US as the driver of demand for consumer goods,” he adds.
The Customs figures showed that China’s exports fell last year by 16 percent from their 2008 levels – the first annual drop since 1983, when economic reforms were just getting underway. But that fall was still not as steep as Germany’s, allowing China to take over the No. 1 spot in the world exporters’ league.
China’s newly reinvigorated export performance seems likely to herald fresh trade tensions with the US, which has already slapped extra tariffs on Chinese tires and steel products, which Washington deemed were being sold at unfairly low prices.
Some economists have suggested that the encouraging export figures might induce Beijing to allow its currency, the renminbi, to rise later this year. Chinese Prime Minister Wen Jiabao, however, apparently unwilling to do anything that might dent exports and thus jobs, said last month his government “absolutely would not yield” to Western calls for a revaluation of the renminbi.
December’s trade figures indicate that Chinese industrial output increased by 25 percent year on year, and that its GDP grew at an annual rate of 11 percent in the last quarter of 2009.