China trade boost adds to hope that the slowdown has ended

Ben Southwood
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CHINESE export growth rocketed to a seven-month high in December, adding to evidence the world’s second biggest economy had turned a corner.

Exports were 14.1 per cent higher in December than the same month in 2011, easily surpassing analyst expectations that the measure would show four per cent growth.

This growth drove the Asian giant’s trade surplus even further into positive territory, climbing from $19.6bn (£12.1bn) in November to hit $31.6bn.

This positive news came in tandem with a rise in HSBC’s emerging markets index, indicating faster growth in developing economies during the fourth quarter of the year.

The headline index rose from 52.2 in the third quarter to reach 52.9, HSBC said, further above the 50 value that indicates no change in output. This was the first time the pace of expansion had increased since mid-2011, and potentially indicating that recent slowdown in emerging market growth is over.

But both of these nuggets of upbeat data cannot rule out the possibility that – despite a raft of pro-growth reforms from Premier Wen Jiabao’s economic team – China’s growth for the whole of 2012 will come in lower than any year since 1999. And the data will not be easy reading for Japan – whose exports to its biggest trading partner collapsed 20 per cent over the year – as the two states came to loggerheads over the Senkaku/Diaoyu island chain.