China exports shrink most in 2 years in December, Latest Business News - The New Paper

China exports shrink most in 2 years in December

This article is more than 12 months old

BEIJING :  China's exports fell the most in two years last month and imports also contracted, pointing to further weakness in its economy this year and deteriorating global demand.

Exports unexpectedly fell 4.4 per cent, with demand in most of its major markets weakening.

Imports also saw a shock drop, falling 7.6 per cent in their biggest decline since July 2016.

Adding to policymakers' worries, China's trade surplus with the US rose 17.2 per cent to US$323.32 billion (S$437.8 billion) last year. It is the highest on record going back to 2006, according to Reuters' calculations and could prompt President Donald Trump to turn up the heat on Beijing in theirspat.

Softening demand in China is already being felt globally, with slowing sales of goods ranging from iPhones to luxury cars.

The dismal trade readings suggest China's economy may have lost more momentum late in the year than earlier thought, despite growth boosting measures ranging from higher infrastructure spending to tax cuts.

Some analysts had already speculated that Beijing may have to speed up and intensify its policy easing and stimulus measures this year after factory activity shrank in December.

"Export growth dropped more than anticipated as global growth softened and the drag from US tariffs intensified. Import growth also fell sharply in the face of cooling domestic demand. We expect both to remain weak in the coming quarters," Capital Economics said.

Sources said Beijing plans to lower its economic growth target to 6 per cent to 6.5 per cent this year compared with last year's expected 6.6 per cent. - REUTERS