China economy: Export growth regains vigour

Event

China’s exports grew by 14.1% year on year in December, while imports rose by 6%, according to data from the customs authority released on January 10th.

Analysis

The strong trade performance in December follows a lacklustre November, when exports rose by 2.9% year on year and imports were unchanged on the same basis. The December data have helped to lift exports in 2012 as a whole to US$2.1trn, representing a rise of 8% compared with 2011, while imports totalled US$1.8trn in the year, up by 4.3%. As a result, the trade surplus shot up from US$155.5bn in 2011 to US$232.2bn in 2012. The contribution of net exports to real GDP growth is likely to have been significant: our forecast assumes that it contributed 0.4 percentage points to the rate of economic expansion in 2012, in contrast to the previous year, when net exports subtracted 0.4 points from GDP growth.

The export sector’s performance in December received a boost from stronger demand from most major markets. Exports to the US rose by 10.3% year on year, while those to the EU ended their previous six-month run of declines to post growth of 2.3%. Sales to South Korea and Taiwan strengthened, with year-on-year growth in exports to Taiwan shooting up to an astonishing 51.9%. However, sales to Japan contracted more steeply in December, falling by 7.4% year on year, compared with a drop of 3.8% in November. Growth in exports to Association of South-East Asian Nations (ASEAN) economies varied widely, slowing slightly in the case of Thailand and the Philippines but accelerating sharply in that of Indonesia and Singapore.

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