China's trade surplus shrinks as exports plunge

[Kilgor]

China's exports plunged 25.7% in February from a year earlier, in another sign of the depth of the global slowdown.

The world's third-largest economy last month posted exports of $US64.9 billion ($100 billion), the customs bureau said today. Imports last month dropped 24.1% to $US60.1 billion.

The resulting trade surplus was $US4.84 billion, compared with $US39.1 billion in January and a record $US40.1 billion in November, the customs administration said.

Economists had on average expected a $US27.3 billion surplus based on a 5% fall in exports and a 25% drop in imports from year-earlier levels.

"This is clearly worse than expected," said Robert Subbaraman, a Hong Kong-based analyst with Nomura International. "We were looking for a rise (in exports) of 1.2%. The market consensus was looking for a rise of 1%."

The trade surplus in February 2008 was $US8.6 billion.

It was the fourth consecutive monthly decline in both exports and imports.

wires
http://www.brisbanetimes.com.au/news/business/chinas-trade-surplus-shrinks-as-exports-plunge/2009/03/11/1236447288710.html

Can a mod please add a C

[Siddar]

A almost 90% drop in trade surplus over a period of just four months is just incredible. I dont see how china is capable of loosing upwards of 10% of its GNP from a vanishing trade surplus that these numbers show and yet still somehow expect to grow at 7-8% rate for 2009.

There is a reality gap developing in china it seems.

[2Sheds_Jackson]

I was thinking the same thing. I assumed that they were planning to grow domestic consumption via stimulus programs but I think those numbers are still way too optimistic.

[Siddar]

I think there just atempting a big lie campaign saying China's economy is growing when in fact the opposite is happening.

[ayanami_tard]

china's economy IS growing albeit on slower rate

[1curious]

I dont see how china is capable of loosing upwards of 10% of its GNP from a vanishing trade surplus that these numbers show and yet still somehow expect to grow at 7-8% rate for 2009.

There is a reality gap developing in china it seems.
All preliminary estimates are just that - estimates. No one takes them seriously anymore after just about all credit rating agencies and analysts missed the global crisis depth and timing...Moreover, it is impossible to predict the magnitude of trade and GDP decline due to time delay built into ANY export-centric economy ... yet, Chinese have most of the tools to keep their GDP growing - mainly due to INTERNAL investment in infrastructure and the stimulus package geared to raise consumption.

True, dwindling exports hurt them but they have more control over their banks than any government in the West over their banks - this facilitates ease of credit and the stimulus where they want to see it.

Chinese were planning a budget deficit of 3% of GDP this year...peanuts.
They also are in much better shape that the West in terms of public and private debt. I read some place that percent of GDP growth in China will depend on the US decline in proportion of (-) 1.3 to 1.

[Siddar]

All preliminary estimates are just that - estimates. No one takes them seriously anymore after just about all credit rating agencies and analysts missed the global crisis depth and timing...Moreover, it is impossible to predict the magnitude of trade and GDP decline due to time delay built into ANY export-centric economy ... yet, Chinese have most of the tools to keep their GDP growing - mainly due to INTERNAL investment in infrastructure and the stimulus package geared to raise consumption.

True, dwindling exports hurt them but they have more control over their banks than any government in the West over their banks - this facilitates ease of credit and the stimulus where they want to see it.

Chinese were planning a budget deficit of 3% of GDP this year...peanuts.
They also are in much better shape that the West in terms of public and private debt. I read some place that percent of GDP growth in China will depend on the US decline in proportion of (-) 1.3 to 1.

The trade numbers from nov to feb represent a -10% shift in the size of China's economy. Its really very simple math China went from a 40 billion $ surplus to a 4 billions $ one take that 36 billion $ reduction and multiply by 12 that comes out to 432 billion $ now comapre that to number to total size of China's economy estimates at 4000 billion $.

Now how do you take the above numbers and manage to produce a credible claim that China will grow 7-8% this year?

China is also going to a have budget defict of at least 20% this year because of the 915 billion $ stimulus package they are doing.

[pave_hawk]

The trade numbers from nov to feb represent a -10% shift in the size of China's economy. Its really very simple math China went from a 40 billion $ surplus to a 4 billions $ one take that 36 billion $ reduction and multiply by 12 that comes out to 432 billion $ now comapre that to number to total size of China's economy estimates at 4000 billion $.

Now how do you take the above numbers and manage to produce a credible claim that China will grow 7-8% this year?

China is also going to a have budget defict of at least 20% this year because of the 915 billion $ stimulus package they are doing.
Trade surplus is not a determinant factor of GDP growth of a coutry. U.S. has trade deficit for a long time, but this didn't prevent it having 3%~4% GDP growth in good years.

[Siddar]

Trade surplus is not a determinant factor of GDP growth of a coutry. U.S. has trade deficit for a long time, but this didn't prevent it having 3%~4% GDP growth in good years.

the US economy is around 14 trillion a incease in trade deficit of around 100 billion a year would subtract less then 1% from US economic growth. A stable deficit would not have any effect on economy on a year by year basis. US tarde numbers have never moved as fast are been as large in percentage terms as a total US economy as the numbers coming out of China in the past few months.

Changes in US trade deficit do have a impact on US economy but they have always been in the less 1% of GDP range on a yearly basis what has happened in China recently is a 10% shift in the space of four months