China trade surplus drops

City A.M. Reporter
China's trade surplus fell to its lowest in nine months in January after imports surged, supporting the government's case ahead of a G20 meeting that it is doing enough to spur domestic demand without speeding up currency appreciation.

The trade surplus shrank to $6.5bn (£4.05bn) from $13.1bn in December, well short of forecasts for a $10.7bn gap.

Global stocks and commodity prices climbed higher, with the surprisingly strong imports highlighting China's massive appetite for raw materials and its solid export growth hinting at solidifying recoveries in the U.S. and European economies.

In the past, a weaker surplus would have caused concern for the Chinese government, but it has been trying to shift the economy towards greater reliance on consumption and less on exports, in part to address critics who say that its success has come at the expense of other countries.

It was the third consecutive month of a declining trade surplus, and though not enough to mark a definitive change, that streak provides an important symbolic lift to China before a G20 meeting this week of finance ministers from the world's biggest developed and developing economies.

China's imports rose 51 per cent in January from a year earlier, blowing past market forecasts for a 28 per cent rise. Exports rose 37.7 per cent in January, topping expectations for a 22.4 per cent rise, the customs administration said.