China announced Friday a contraction of foreign trade in January, Chinese New Year celebrations and the crisis in Europe have affected exports, while imports suffer from weak domestic demand, analysts said.
Imports from China totaled 122.6 billion dollars, down 15.3% year on year, while exports reached 149.9 billion USD, down 0.5%, reported General Administration of Customs.
China’s trade surplus thus stood at $ 27.3 billion, against $ 16.5 billion in December.
The decline in exports and imports in January were partly related to Chinese New Year, which fell on January 23 this year, and the debt crisis in Europe, the first market for Chinese exporters.
China’s trade with the EU was down 7.1% year on year, down by 3.9% with the U.S. and by 18.4% with Japan.
The trade fugure has increased with some emerging countries, including a jump of 26.8% with Russia.
The Chinese Commerce Minister Chen Deming warned Thursday that the numbers would be bad.
“Exports in January can not make us optimistic,” he said in comments, reported on the website of the ministry.
“The Chinese trading companies, especially small and very small businesses, are under increasing pressure,” he added.
“China has recorded its worst foreign trade figures from the worst of the financial crisis” of 2008-2009, said Alistair Thornton, economist at IHS Global Insight, based in Beijing.
The government has been trying for several years to rebalance an economy overly dependent on exports and investment towards more domestic demand by increasing household consumption, but rebalancing has not yet been initiated during the year.
Lu Ting, an analyst at Bank of America – Merrill Lynch, for his part considers that the weakness of China’s foreign trade in January was due to the New Year holidays and calculated that if taking into account the number of working days, exports had increased year on year by 28.7% and imports by 10%.