China trade figures plunge in November. declines underscore the rapidly worsening conditions in China's economy.
Exports shrink for the first time since 2001 and is down by 2.2% from a year earlier. Imports are down by 17.9%.
China trade figures plunge in November
Exports shrink for the first time since 2001 and is down by 2.2% from a year earlier. Imports are down by 17.9%. The declines underscore the rapidly worsening conditions in China's economy.
By Don Lee
8:29 AM PST, December 10, 2008
Reporting from Shanghai -- China's trading activity collapsed last month, as exports shrank for the first time in more than seven years and imports plunged, the government reported today.
The 2.2% year-over-year decline in November exports contrasted with a 19.2% increase in October, underscoring the rapidly deteriorating conditions in China's economy.
The falloff in exports was the first since June 2001 and worse than analysts had expected. It cast further doubts on whether China's economy could grow at a pace that would create enough jobs at home or provide a significant boost to a slumping global economy.
"It basically reflects what you're seeing on the ground -- factories are closing," said Andy Xie, an independent economist in Shanghai.
"It's very grim," he added. "You can bet the next few months are going to be worse."
The nation's imports sank 17.9% in November from a year earlier, something being painfully felt in places such as Australia, Chile and parts of the U.S. that supply copper and other raw materials to China, the world's manufacturing hub.
The sharp drop in imports, partly reflecting the decline in commodity prices, boosted China's monthly trade surplus to about $40 billion, a record high. That could add to trade tensions between China and its major partners, the U.S. and Europe.
The latest report was hardly news to cheer about in Beijing.
The plunge in imports indicates weakening domestic demand. And the sharp pullback in export orders from around the world has dealt a blow to China's industrial base and wiped out countless jobs, triggering labor unrest that poses a severe test to the Communist Party leadership.
"On the one hand, government doesn't want exports to drop dramatically and hurt social stability," said Zhang Bin, a deputy director of international finance at the Institute of World Economics and Politics, a government think tank in Beijing. "But on the other hand, it is necessary for China to have a structural adjustment and industry upgrade . . . to decrease some exports and transfer resources from the manufacturing industry to the service industry."
Zhang says he thinks the central government's recently announced $586-billion economic stimulus package, consisting mainly of infrastructure projects, will be enough to sustain adequate growth.
The government, though, is expected to continue loosening lending policies and pushing through measures to bolster the sagging property market and help export businesses.
November's trade report was released as top leaders in Beijing, concluding an annual economic planning meeting, pledged to maintain a "stable, healthy growth" next year by boosting domestic demand and restructuring the economy, according to the official New China News Agency.
But Chinese leaders are facing powerful global head winds. Chinese exports to the U.S. had been slipping for some months, but more recently, Europe, Japan and the Asia-Pacific region also have cut back on orders. Chinese-made steel products, electrical machinery, electronics and light manufacturing, such as apparel, all saw a sharp decline last month, analysts said.
"Demand is simply disappearing," said Tao Wang, a UBS Securities economist in Beijing, in a research report.
Among the hardest hit has been China's shipbuilding industry, which has been reeling from cancellations. That in turn has spilled into many of the industry's suppliers, such as Dalian Lushun Xinfei Ship Machinery Co. in northeastern China.
"Many of the small manufacturers in our area are half-dead," said Li Jiyou, the company's general manager. He said that his company would be lucky to break even this year, and that he feared what lay ahead.
"The aftershocks [of the global credit crisis] haven't yet spread completely to our industry. Next year is going to be a big challenge for us."
In November, China's exports to the U.S. dropped 6.1% from a year earlier. With American consumers continuing to cut back in the face of severe job losses, the decline for many Chinese manufacturers is likely to accelerate.
Los Angeles-based Wessco International is forecasting a 10% to 20% decline next year in the volume of toiletry kits, stationery, bags and other products that it makes largely in China for airlines, hotels and cruise lines, said Petros Sakkis, Wessco's manager based in Hangzhou.
Less than a year ago, American companies sourcing from China were fretting about an appreciating Chinese currency, soaring raw material costs and pressure from local governments that only seemed to want high-end manufacturing. But all that's eased since the global financial crisis took hold and spread to China.
"China needs us again," Sakkis said.
Lee is a Times staff writer. |
