April 10,2009

China's Trade Rebound Hailed as Stimulus Policy Takes Effect

By CSC staff, Shanghai
China’s imports and exports are seeing some light after slogging through a dark tunnel. Although total imports and exports are both still declining year on year, the decline has slowed. More importantly, March imports and exports saw a steep month-on-month growth, which China Customs hailed as a "considerable sign of rebound." China’s trade surplus also continues its rapid growth.
Imports and exports in March totaled $162.02 billion, 20.9% down, year on year. Exports totaled $90.29 billion and imports $71.73 billion, drops of 17.1% and 25.1% over the previous year. The year-on-year decline of import & export, exports, and imports was 6.3, 4, and 9.1 percentage points, respectively.
The trade surplus in March reached $18.56 billion, up 41.2%, year on year, and total imports and exports grew by 23.8% over the previous month, with exports up 32.8% and imports 14%. "These indicators all show an apparent rebound in China’s foreign trade," claimed China Customs.
China did well in the export of labor-intensive goods, in which it enjoys strong advantage. Export of clothing, furniture, shoes, cases and bags totaled $7.43 billion, $2.23 billion, $2.08 billion, and $980 million, respectively, growing 9.9%, 1.3%, 7.7%, and 11.7%, year on year, and 72.5%, 78.1%, 42.6%, and 90.7% over the previous month. This helps to relieve employment pressure on migrant workers, and shows the demand for daily products is less influenced by the economic recession.
Leading indicators for March all show rebound. In particular, economic data for China, including loan growth, Purchasing Manager’s Index (PMI), recovery in residential sales volume--if not prices--and public investment, do point to a stabilization or even slight improvement. Both imports and import prices were rising. According to China Customs, "efforts to expand internal demand are seeing some initial effects".
Between October and December, 2008, China’s imports dropped by 8.7%, 19.5%, and 16.2%, month on month. In January and February this year imports declined by 3.7% and 5.4%, month on month, but grew by 14.1% in March.
In March, China’s commodities imports totaled $19.37 billion, a fall of 36.5%, year on year, but up 21%, month on month. China’s import prices dropped by 17.9%, year on year, but rose 2.7%, month on month, helping to stabilize production expectations and boost consumption confidence.



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