China economic recovery intact, but weak exports drag

Mon Dec 10, 2012 6:11am EST
 

By Aileen Wang and Kevin Yao

BEIJING (Reuters) - China's exports growth slowed sharply to a much lower than expected 2.9 percent in November, a customs report said on Monday, underscoring the global headwinds dragging on an economy showing otherwise solid signs of a pick up in domestic activity.

Data at the weekend showed both industrial output and retail sales rose in November at their fastest annual pace in eight months, reinforcing the view that growth in the world's second-biggest economy is finally picking up after a long slide.

However, weak exports will drag on the revival in the Chinese economy as its major buyers struggle; Europe and Japan with recession and the United States with a sluggish recovery.

"The external sector remains fragile, although recent manufacturing activities have showed convincing signs of stabilization and a gradual recovery," said Connie Tse, an economist at Forecast Pte in Singapore.

"I expect export growth to pick-up throughout 2013, but this is likely to be gradual and volatile in absence of a material improvement in the euro zone."

China's annual exports growth in November was well below expectations for a 9.0 percent increase and behind October's 11.6 percent pace, customs figures showed. The Christmas shipment season for smartphones from the world's biggest exporter of mobile phones came to an end in November, which analysts said may explain the softening.

Imports were unchanged on the year, off forecasts for a 2.0 percent rise. The relatively subdued reading masked a surge in imports of crude oil, iron ore and copper that analysts said backed the view domestic activity was picking up.

The trade data represented the weakest performance for exports and imports since August and a contrast to data on the domestic economy, which is raising expectations that seven straight quarters of sliding GDP growth will come to an end in the fourth quarter.   Continued...

 
A general view of a container port in Shanghai June 24, 2009. REUTERS/Aly Song