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 (£4.1bn) 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 US and European economies.
In the past, a weaker surplus would have caused concern for the Chinese government, but more recently it has been trying to shift the economy toward 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 a symbolic boost to China before the G20 meeting this week of finance ministers from the world’s biggest developed and developing economies.
Analysts warned, however, that its surplus could rebound later this year. “There tends to be a seasonal pattern and there is generally a decline in the trade surplus at the beginning of the year,” said Jian Chang, an economist with Barclays Capital in Hong Kong. “Exports tend to be weak in the first quarter, while there is no such pattern in imports.”
The G20 meeting in Paris on 18 and 19 February will try to hash out a gameplan for tackling global economic imbalances.
City A.M. Reporter