China Dethrones Germany To Become World's Largest Exporter
Source: ctei Date: 2010-01-13
China's General Administration of Customs (GAC) said on Sunday that exports recorded an impressive 17.7% annual growth to reach $130.7 billion in December, breaking a 13-month decline in external trade that was a result of the global downturn. That came well above market expectations for a 5% increase, after the 1.2% fall in the previous month.
Exports of machinery & electronic products soared 26.9% and textile exports were up 25.2%. Furniture exports and exports of toys increased 10.8% and 4.4%, respectively.
Imports, on the other hand, surged 55.9% from a year earlier to $112.3 billion, accelerating from the 26.7% growth in the preceding month. Economists were looking for a 32.5% increase. The overall trade balance logged a surplus of $18.4 billion, smaller than the $19.1 billion surplus recorded last month. Imports of commodities such as iron ore, crude oil and soybeans, all increased.
The figures suggest that China will surpass Germany as the world's top trading nation, although this will not be confirmed until Germany releases its full-year trade data in February.
Huang Guohua, a spokesman for GAC said the increase in exports was "an important turning point" for the country.
"It is safe to say now that Chinese exporters have come right through the period of weakness," he said.
For 2009 as a whole, China's foreign trade dropped 13.9% from a year earlier to $2.21 trillion. Exports fell 16% from 2008 to $1.2 trillion, while imports were down 11.2% to $1.01 trillion to log a cumulative trade surplus of $196.1 billion.
China's resurgent trade returns for 2009 is likely to lead renewed calls for yuan appreciation from its trading partners. Mark Williams, senior China economist at Capital Economics, said continued double-digit gains in exports will strengthen the case for the currency peg to be loosened sooner than previously thought.
Last week, a prominent Chinese think tank called on Beijing to allow the yuan to rise by 10% in a one-off revaluation against the U.S. dollar before the currency can float in a wider band.
Zhang Bing, an economist at the Chinese Academy of Social Sciences, wrote in an essay that allowing the yuan to appreciate in a one-off revaluation would not have a detrimental effect on the economy and that now was the right time to push forward the exchange rate reform.
However, senior government officials have repeatedly stated that they have no intention of bowing to international pressure, with Premier Wen Jiabao recently quoted as saying that China "will not yield" to foreign demands that it revalue its currency.
