China's economic slowdown sees markets cautious

Some disappointing numbers for China overnight, as it missed its official target on foreign trade for the second year in the row, confirming a loss of momentum at the end of 2013.

But despite its export growth slowing by more than expected in December, the country has now overtaken the US as the world's largest trader of goods.

The data subdued Asian markets, which also await the US jobs report:

  • Shanghai Composite is trading 0.7 per cent lower, at 2,013.12.
  • Nikkei 225 is trading 0.1 per cent lower, at 15,867.0.
  • Hang Seng is trading 0.3 per cent higher, at 22,852.8.
  • Kospi is trading 0.8 per cent lower at 1,931.2.

Senior Chinese officials have expressed their fears that their exporters are suffering in the face of a rapidly falling yen, as Japan continues its intensive fiscal stimulus programme.

Rising costs, including labour, have also put pressure on exporters.

In December exports rose 4.3 per cent from a year earlier, slowing from 12.7 per cent in November. It was below market expectations of a 4.9 per cent increase.

Imports went up 8.3 per cent, increasing from 5.3 per cent in November and exceeding market expectations that the rate would continue the same.

The December trade surplus fell 24.3 per cent from a year earlier to $25.6bn. This was below the forecast of $31.2bn.

Analysts are expecting a brighter 2014, with demand picking up in Europe and the US, although growth is predicted modest.

Data released by the Office for Naitonal Statistics yesterday showed exports from the UK to China rose 9.6 per cent to £3.3bn in the three months to November 2013, with imports from China up 1.7 per cent to £8.6bn - both record highs.

Leaders are keen to move towards more sustainable expansion for the country, moving away dependence on exports and focusing on domestic consumption.

The Chinese Commerce Ministry has said it will maintain steady growth this year, balancing its trade structure further by upping imports of raw materials and energy products.