By Bloomberg News
Jan. 11 (Bloomberg) -- China’s exports surged in December and imports rose to a record in a stronger-than-forecast trade rebound that may lessen the case for governments to sustain stimulus programs this year.
Exports climbed 17.7 percent from a year earlier, the first increase in 14 months, and imports jumped 55.9 percent, the customs bureau said on its Web site yesterday. Year-on-year comparisons are affected by the tumble that began in late 2008, when the global credit crisis deepened.
“A global recovery is gaining momentum and countries’ exits from stimulus may come earlier than expected, including for China,” said Wang Hu, a Shanghai-based economist at Guotai Junan Securities Co., the nation’s largest brokerage by revenue. “Soaring imports are more evidence that China’s economy may face an increasing danger of overheating.”
China’s central bank last week guided three-month bill yields higher for the first time since August, suggesting that the government wants to rein in liquidity to limit the risks of real-estate bubbles and resurgent inflation. Stronger exports may fuel overseas calls for gains by the yuan against the dollar after policy makers halted appreciation for 17 months to help manufacturers weather slumping demand.
The trade report spurred the currencies of Australia and New Zealand on bets their economies will benefit from the increase in shipments to China. The Australian dollar rose 0.4 percent to 92.85 U.S. cents and its New Zealand counterpart gained 0.5 percent to 74 cents as of 10:19 a.m. Sydney time.
Property Lending
China’s State Council pledged yesterday to step up “guidance” of property lending and counter inflows of speculative capital after a record expansion of credit in 2009 that was part of government efforts to prop up growth.
None of 21 economists in a Bloomberg News survey forecast such large gains in exports or imports. China’s shipments to the U.S. and the European Union grew 15.9 percent and 10.2 percent respectively from a year earlier, the data showed. Imports from Australia and Malaysia more than doubled.
China overtook Germany as the world’s No. 1 exporter of goods in 2009 even as the Asian nation reported yesterday its first annual decline in shipments in more than 25 years.
The data “could add more pressure on the renminbi,” said Lu Ting, an economist at Bank of America-Merrill Lynch in Hong Kong, using another term for the yuan. The “handsome recovery of China’s external trade” mirrored gains by other nations in the region, Lu said.
Taiwan Trade
Taiwan reported its biggest export gain in 14 years in December after shipments plunged a year earlier.
Export gains may make China, the world’s fastest-growing major economy, less dependent on government stimulus measures, including spending on railways, roads and power grids.
In December, exports were $130.7 billion and imports were $112.3 billion, leaving a trade surplus of $18.4 billion. The customs bureau said the import value was unprecedented and exports were the fourth-largest on record.
“The rebound in export growth is no surprise given the collapse in trade at the end of 2008,” said Brian Jackson, an emerging-markets strategist at Royal Bank of Canada in Hong Kong. “But this is still good news and reflects a real improvement in external demand.”
Growth Outlook
Among other positive signs for the global economy, the International Monetary Fund has said it will probably raise its estimate for 2010 world growth from 3.1 percent. European executive and consumer confidence jumped in December to a level last seen before the demise of Lehman Brothers Holdings Inc. in 2008, a report showed last week.
For the full year, China’s exports fell 16 percent and imports declined 11.2 percent. The trade surplus was $196.1 billion, sliding for the first time since 2003 and falling short of 2008’s record $295.5 billion.
December’s numbers show the slump is over for China’s exporters, Huang Guohua, a statistics official with the customs bureau, said yesterday in an interview broadcast on state television. That comment contrasts with Chinese leaders saying in the past month that the economic recoveries of China and the world are not yet on solid foundations.
Chinese imports are being boosted by the nation’s economic acceleration, manufacturers buying materials for processing into exports, and an increase in commodity prices. On the nation’s east coast, Qingdao Port Group Co. is expanding wharves to handle iron-ore imports.
Claiming Credit
“Surging imports show that the economic stimulus policies are effectively boosting domestic demand, which also helps to drive the global economic recovery,” the customs bureau said in a statement.
For all of 2009, iron-ore imports surged 42 percent from a year earlier, those for copper and its products soared 63 percent, and purchases of aluminum and its products climbed 164 percent, the data showed.
While Premier Wen Jiabao said Dec. 27 that the nation will “absolutely not yield” to calls for currency gains, yuan forwards indicate that the government will allow appreciation of 3 percent against the dollar in the next year. The yuan closed at 6.8275 per dollar on Jan. 8.
Yuan forwards rose to their highest level in more than a month on Jan. 8 after the central bank guided the increase in three-month bill yields. The currency gained 21 percent in three years after a fixed exchange rate was scrapped in July 2005.
China surpassed Germany in 2007 to become the third-largest economy and is forecast to overtake Japan this year, assuming the No. 2 spot behind the U.S.
Germany shipped 734.6 billion euros ($1.05 trillion) of exports in the first 11 months of last year, the Federal Statistics Office said Jan. 8. That compared with China’s $1.07 trillion over that period.
--Paul Panckhurst, Li Yanping. Editors: Paul Panckhurst, Chris Anstey
To contact Bloomberg News staff for this story: Paul Panckhurst in Beijing at +86-10-6649-7574 or ppanckhurst@bloomberg.net
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