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Exports and imports fall again in Dec.

(chinadaily.com.cn/Agencies)
Updated: 2009-01-13 16:19

China's exports and imports declined for the second consecutive month in December, reflecting weakening external and domestic demand amid the global financial crisis, the customs said Tuesday.

In this file image taken April 6, 2006, a man looks at rows of containers at the Yangshan deep water port off the coast of Shanghai, China. China's exports fell in December for a second month as a trade slump that has prompted a wave of factory closures and layoffs worsened. [Agencies]

Exports fell 2.8 percent year-on-year last month after dropping 2.2 percent in November in the first monthly decline in more than seven years.

However, trade surplus remained at elevated levels – US$38.98 billion, albeit smaller than a record US$40 billion in November, as imports slumped 21.3 percent.

The latest export figures did not came unexpected, as the financial crisis is forcing consumers in developed countries to tighten their belt, thus reducing the demand for Chinese products.

Economists said the situation is unlikely to reverse in the near future as China's major trade partners are all stuck in recessions.

Given the economic conditions of the EU which is the largest destination for Chinese products, China's exports could grow only 6 percent this year, said Ma Jun, Deutsche Bank Greater China's chief economist.

Jing Ulrich, JP Morgan's chairwoman of China equities foresaw an even dimmer outlook. "Export growth is likely to be flat in 2009, with negative year-over-year growth in the near-term," she said in a report.

The slump in global sales has forced thousands of Chinese factories to close. "Starting in October, our orders dropped sharply. We basically stopped production after October," said Sun Bin, general manager of Huang Gang Hengsheng Clothing Import & Export Co. in the central province of Hubei. The company sells clothing to the United States, Europe and the Middle East.

"We don't dare to produce, because the more clothes we make, the more we will lose," Sun said.

Beijing has cut taxes for exporters and taken other steps to help struggling producers of clothing, toys, electronics and other goods.

The government is trying to reduce reliance on exports with a 4 trillion yuan ($586 billion) stimulus package announced in November that is aimed at by boosting domestic consumption. Premier Wen Jiabao has promised additional steps to create jobs.

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