China’s trade boom hits speed bump as Dec imports slow
BEIJING: China’s exports and imports growth slowed in December after surging in the previous month, adding to signs of ebbing economic momentum as the government extends a crackdown on financial risks and factory pollution.
A synchronized uptick in the global economy over the past year has been a boon to China and much of trade-dependent Asia, with Chinese exports in 2017 growing at their quickest pace in four years.
The sharp December imports slowdown, however, is raising concerns that the world’s secondbiggest economy faces domesticdemand pressure as authorities turn off cheap credit and restrict speculative financing.
“We have since long expected China’s domestic demand and imports to slow in 2018 on gradually tighter monetary and financial policies and slower real estate activity momentum”, said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong.
In December, exports rose 10.9 per cent from a year earlier, beating analysts’ forecast of a 9.1 per cent increase, but cooling from a robust 12.3 per cent gain in November, the General Administration of Customs said on Friday.
Imports grew at an even slower pace of 4.5 per cent year-on-year last month, the weakest since they rose 3.1 per cent in December 2016, and way below forecasts of 13.0 per cent growth.
They had boomed 17.7 per cent in the previous month.
Despite the December slowdown, the overall picture for 2017 underscored strong global appetite for Chinese products ranging from electronics, household appliances and a vast array of consumer goods.
Exports from the Asian giant for the full year rose 7.9 per cent, the fastest rate since 2013, while imports also gained a sizzling 15.9 per cent – the best since 2011, thanks to insatiable Chinese demand for commodities.
But customs spokesman Huang Songping on Friday cautioned that strong growth in foreign trade would be difficult for China to maintain, adding that half of the growth rate in the value of imports last year was from higher prices.
The weaker imports in December backs recent data showing a slowdown in economic growth is underway, with domestic demand hit by the government’s intensified war on polluting factories and a crackdown on debt risks.
Commodities imports were mixed, with copper purchases down 8.2 per cent year-on-year by volume in December while coal and natural gas imports were up.
Iron ore imports for the year hit a record high of 1.075 billion tonnes.
Economists estimated that China’s import growth in December was entirely due to prices, with volumes down year-on-year.
Growth of China’s imports of electronic and high-tech products year-on-year slowed to single digits from over 15 per cent the previous month, customs data showed. —
We have since long expected China’s domestic demand and imports to slow in 2018 on gradually tighter monetary and financial policies and slower real estate activity momentum. Louis Kuijs, Oxford Economics Asia economics head