China-Exports down.
CHINA-EXPORTS WELL DOWN.
China’s exports fell for a fifth month in March, adding urgency to government efforts to stimulate domestic demand to revive growth in the world’s third- biggest economy.
Overseas sales declined 17.1 percent to $90.29 billion from a year earlier, the customs bureau said on its Web site. Imports dropped 25.1 percent, leaving a trade surplus of $18.56 billion.
Collapsing world trade and the nation’s slowest economic expansion in seven years have cost the jobs of millions of factory workers and prompted Premier Wen Jiabao to roll out a 4 trillion yuan ($585 billion) stimulus package. To spur consumption, China is subsidizing rural purchases of televisions and refrigerators and plans a 29 percent increase in welfare spending this year.
"External demand is unlikely to recover any time soon and exporters have no choice but to endure the difficulty," said Ma Jun, chief China economist at Deutsche Bank AG in Hong Kong . "The government must beef up social-welfare spending so the jobless have enough to live on."
The yuan traded at 6.8333 against the dollar as of 4:21 p.m. in Shanghai , from 6.8336 before the numbers.
The export decline was less than February’s record 25.7 percent drop. The median forecast in a Bloomberg News survey of 15 economists was for a 20 percent decline. February’s trade surplus was $4.84 billion.
’Positive Signs’
The trade figures showed "positive signs," the customs bureau said, adding that exports of labor-intensive products such as garments, furniture, shoes increased from a year earlier. The value of imports stabilized, it said.
Seasonally adjusted figures showed a 32.8 percent jump in exports from the previous month and a 14 percent increase in imports, the bureau said.
Chinese ports’ cargo traffic rose for the first time this year in March while a decline in container traffic slowed, the Ministry of Transport said April 8.
The export numbers may reflect a "modest improvement in global demand" and restocking by retailers in the U.S. , said Jing Ulrich, head of China equities at JPMorgan Chase & Co. in Hong Kong .
Shipments to the European Union fell 20.2 percent from a year earlier, while those to the U.S. declined 12.6 percent..
Appliance Sales
Haier Group Corp., China ’s biggest appliance maker, may benefit from efforts to counter the collapse in trade by stimulating consumption at home. The government has earmarked 20 billion yuan ($2.9 billion) of subsidies for home-appliance purchases in the countryside, hoping to generate 150 billion yuan of sales this year.
In the long term, an expanded social safety net may also boost demand. The State Council issued this month an 850 billion yuan health-care plan, including building at least one hospital in every county and expanding medical insurance coverage to 90 percent of the 1.3 billion population by 2011.
Some economists expect China ’s exports to revive later this year as the global economy stabilizes and trade finance improves. The Group of 20 nations pledged this month to make at least $250 billion available in the next two years to support the finance of trade through export credit agencies and development banks such as the World Bank.
Credit Freeze
The "collapse of global trade and China’s exports in the last few months was not in small part due to a freeze in trade credit and aggressive de-stocking abroad as a result of extreme uncertainty," said Wang Tao, an economist at UBS AG in Beijing. "As expectations start to stabilize, we expect to see export orders rebound in the coming months."
Still, research by the National Development and Reform Commission, China ’s top economic planning agency, suggests shipments may decline 10 percent this year, compared with a 17 percent gain in 2008.
China ’s full-year exports haven’t fallen since at least 1990, government data shows.
The Paris-based Organization for Economic Cooperation and Development predicts that global trade will shrink 13 percent in 2009 as loss-ridden banks cut back on credit to exporters and importers
To aid businesses hit by the slump in demand, China has cut export taxes, halted gains by the yuan against the dollar, and announced revival plans for 10 industries, including autos, steel, shipping and textiles.
China is unlikely to weaken the yuan to aid exporters because that could trigger competitive devaluations by other Asian nations and a political backlash from the U.S. , Deutsche’s Ma said.
