China’s Exports and Imports Fall Sharply

Bad news for the Chinese Economy, the country’s trade slumped has worsened in December as exports fell at their fastest rate in a decade, aggravating a decline that fueled a way of layoffs and fear of unrest.

The nations December exports fell by 2.8% from the same month a year earlier, after a 2.2 % decline in November. China’s global trade surplus for 2008 rose 12.7 % over 2007 to a record of $ 295.5 billion, possibly worsening tensions with the government of U.S. President elect Barack Obama.

China’s trade surplus in January totalled $ US 39.11 billion, roughly in line with $ US 39.00 billion in December. According to Dow Jones Newswires, “The Chinese market had expected an 11 % drop in exports, a 25% fall in imports, and a trade surplus of $ US 29.9 billion last month, according to the median forecasts of 15 economists surveyed.”

Chinese imports of crude oil have dropped to a 15 month low (January est.) of 12.8 million tonnes, or an average of 3.03 million barrels a day. But according to Gong Jinshuang, a senior engineer at China National Petroleum Research Institute of Economics & Technology,”China’s major refineries may still be well stocked with crude oil after robust buying last year.”

If we analyze China’s monthly trade surplus with United States, it has fallen by 9.5% from a year earlier to 12.4 billion (December est.), but the total 2008 surplus with the United States rose 4.6% to 170.8 billion.

Beijing has started to cut taxes for exporters and has taken other steps to help struggling manufacturers. The government is trying to reduce reliance on exports with a 4 trillion yuan ($ 586 billion) stimulus package announced in November which is aimed at boosting domestic consumption. Premier Wen Jiabao, China’s top economic official, has promised additional steps to create new jobs.

For more on current business and financial news – The Sydney Forex Review