BEIJING — Reversing a 13-month pattern of decline, China’s exports rebounded and marked an overall increase in December, figures released Sunday show, giving further weight to the conventional wisdom that this country’s economy has recovered from the global downturn.
This story first appeared in the January 12, 2010 issue of WWD. Subscribe Today.
Yet economists cautioned that while the reversal in export trends is positive news, much of China’s recovery has come on the back of a massive government spending plan that sought to pour $586 billion into economic development, primarily through creating new infrastructure like roads and railways.
“We are seeing good signs in the new data, especially for December,” said He Weiwen, a Beijing-based trade analyst with the World Trade Union.
Exports in December rose by 17.7 percent from the same month last year, according to the newest import-export figures from China’s General Administration of Customs, while imports surged by 55.9 percent over the previous December. In all, China’s exports for 2009 declined by 16 percent to $1.2 trillion, while imports fell 11 percent to $1 trillion. The new export figures officially place China as the world’s second-largest exporter, just ahead of Germany, if that country’s export projections for 2009 pan out.
Overall, China’s contentious trade surplus shrank significantly last year, contracting by 34 percent to a total of $196 billion.
The Chinese customs agency published the data on its Web site without comment. But trade experts say it signals that China’s massive stimulus spending, undertaken in November 2008, has taken a firm hold and the country’s economy is well on its way to recovery. What remains less certain is how long that spending pattern will continue and what happens next.
Analysts also said continued positive news about China’s trade volume could encourage the central government to consider further appreciation of the country’s currency — a thorny issue in the U.S.-China trade relationship. The Obama administration considers the yuan, which hasn’t changed in value significantly in 18 months, to be heavily undervalued, giving China a major trade advantage.
Li Wei, a U.S. trade expert with the Chinese Academy of International Trade and Economic Cooperation, said China’s central economic officials are reluctant to bow to any outside pressure on the yuan. The country saw major declines in low-profit-margin industries like textiles and apparel with initial steps to allow the currency to rise.
“When the world has seen some economic recovery and stability, we might see some changes [in the yuan’s value],” said Li. “They might be more flexible this year — that’s my personal view.”
Meanwhile, the World Trade Organization in Geneva said China posted double-digit declines in exports of textiles and apparel in the first 11 months of 2009. During the January-to-November time period, the value of China’s textile exports was $53.6 billion, down 11.2 percent from 2008, and shipments of apparel stood at $96.6 billion, an 11.5 percent drop for the same period.
However, Munir Ahmad, executive director of the International Textiles and Clothing Bureau, said, “Domestic consumption of textiles and apparel has gone up in China and more than made up for the fall in exports.”
The chief of the 26-member ITCB, an umbrella grouping of developing country textile and apparel exporters, which includes China, said “other country’s exports have gone down far more.”
Ahmad said he was not aware of any countries that had positive growth in exports of apparel during 2009 other than Bangladesh, Haiti and Vietnam, and noted in the case of Vietnam, exports also went down in the last few months of the year.