China's exports figures plummeted 25.7 percent in February from a year earlier, the fourth straight monthly fall as global demand shrank, the General Administration of Customs said on Wednesday.
China's exports plummeted 25.7 percent year-on-year in February, the worst decline in more than a decade, as global demand deteriorated amid the deepening recession, the General Administration of Customs said Wednesday.
Exports contracted for the fourth month in a row to 64.90 billion U.S. dollars, while imports slumped 24.1 percent to 60.05 billion U.S. dollars.
The surplus narrowed to 4.84 billion U.S. dollars, less than one-seventh of the figure for January.
"Such a drastic fall in exports is rare, showing the severity of the impact of the global downturn, "said Zhuang Jian, senior economist with the Asian Development Bank.
He said as the global downturn had not bottomed out, external demand would continue to weaken throughout the year.
The grim statistics hit Chinese shares, which closed 0.91 percent lower Wednesday, halting an early rally.
EYE-CATCHING SURPLUS DATA
While China was "psychologically prepared" for the export slump, said Zuo Xiaolei, chief economist with Galaxy Securities, the narrowing of the trade surplus was eye-catching.
"The slumping trade surplus, which is very bad for economic growth, tells us that we can't pin too much hope on trade to meet the eight percent growth target for this year," she said.
Total foreign trade was 124.95 billion U.S. dollars last month, down 24.9 percent year-on-year.
Processing trade, which comprised more than half of the total, declined much faster than general trade, the customs agency said.
Imports would certainly fall, as exporters scaled back orders of raw material because of diminishing processing trade, said Tang Min, deputy secretary general of the China Development Research Foundation.
COMMODITY TRADE HIT
Commodities became the biggest victim in February exports, as global downturn sapped demand for raw materials, whose prices have nose-dived since last year.
Exports of coal fell 41.6 percent to 5.11 million tonnes, while steel exports fell 52 percent to 3.47 million tonnes.
The customs agency said exports of labor-intensive products contracted more moderately than total exports, reflecting the government's moves to raise export rebates starting last July.
Garment and accessory exports fell 11 percent to 14.62 billion U.S. dollars, while those of toys sank 17.1 percent to 850 million U.S. dollars.
Grain exports plunged 46.7 percent and fertilizer exports slumped 55 percent. The government curbed exports of these products to ensure supply after major wheat-planting areas experienced the worst drought in half a century.
The customs agency said exports to the United States, European Union and Japan saw double-digit falls, but those declines were still less than the overall level.
Lu Zhengwei, analyst with Industrial Bank Co., Ltd., said the sharp drop was probably due to deteriorating conditions in emerging economies.
LOOKING FOR GROWTH
After the 17.5 percent plunge in January, Tang said the export decline could have been expected to moderate in February, considering the low statistical base of comparison a year ago when the Lunar New Year fell two weeks later.
"It underscores the imperative to look to domestic consumption and investment for growth," he said.
Exports have long played a key part in powering the world's third-largest economy. China's gross domestic product growth slowed to 6.8 percent in the fourth quarter last year, the worst showing in seven years, as the global downturn sapped demand for Chinese goods.
Also, the yuan has risen more than 20 percent since it was unpegged from the U.S. dollar in July 2005, which has weighed on exporters. Premier Wen Jiabao has vowed to keep the rate at an "appropriate and balanced" level.
Commerce Minister Chen Deming said Tuesday that foreign trade faced a "grim picture" in the months ahead.
And Wen said last Thursday in the government work report to the annual legislative meeting that China "must not slacken efforts" to promote its exports, despite the plunge in external demand and growing international protectionism.
Wen pledged measures, including fiscal and tax policies, to ease the difficulties of exporters and "ensure steady growth in foreign trade."
Zhuang said, however, there was little room to further raise export rebates, following several increases starting in 2008.
"So we should look to domestic consumption, although that will take time," he said.
