Dramatic Drop in Foreign Trade
Economist are aroused by puzzle and anxiety bought by the tremendous drop in import and export in January, which did not even stop declining during the Spring Festival.
Compared with the last year, the General Administration of Customs figures, exposed in February 11, fell 17.5 percent. Thus the 2.8 percent fall in December seems of little impact.
More dramatically, imports dropped down to 43.1 percent year-on-year.
There even occurred a rare decline in monthly foreign trade since the reforming and opening up 30 years ago. That’s the 29 percent year-on-year fall of the combined foreign trade in January.
It’s possible for the foreign trade to continue to drop in the more months to come since the global financial crisis is still clouded. It’s predicted by Su Chang, a macro-economic analyst with China Economic Business Monitor that foreign trade would decline by 10 percent in the first three month of this year. He said, “China’s year record may come to be negative, too. But due to the fall in prices of industrial materials the decline in imports would be substantial.”
One year ago, prices of primary goods which China mainly imports, stood on its historic peek, but now they have plummeted into the trough, which he added.
However, there was an exception last month. During the spring festival, the most important festival for Chinese, we had one week of holiday in January, one month earlier than that as usual. If taking the 5 fewer working days into consideration, it’s said that export actually had a6.8 percent year-on-year rise in January and a 4.6 increase if compared with December.
Economists also pointed out another problem – the worldwide deflationary cycle. There are mainly two reasons for the sharp drop in imports. One was the falling global prices (especially prices of crude oil and farm products). The other was the dropping demand for electronic components, which was a mirror of the retrogression of the country’s manufacturing industry.
Ting Lu, economist with Merrill Lynch in Hong Kong, said that there was no way to foresee the effect brought about by the Chinese New Year, and in a note to clients in the monthly trade figures he gave his suggestion that people should show their ignorance.
It’s said by the experts that China is not the worst among its neighboring countries. Jing Ulrich, analyst with JP Morgan, shows in his recent report that when export is sending a message of warning, the situation in China is much better than some neighboring economies which rely more on hi-tech sector. And, Jing Wang, chief economist of Morgan Stanley, also made his remark that China’s export structure is relatively stable in the region because of its diversity.
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