China exports, imports surge boosts recovery hopes
By Nick Edwards
BEIJING (Reuters) - China's exports and imports surged as inflation abated in January, pointing to a rebound in external and domestic demand not solely explained by Lunar New Year holiday distortions, the first hard economic data of the year showed on Friday.
Exports grew 25 percent from a year earlier versus a forecast of 17 percent in a Reuters poll. Imports surged 28.8 percent to comfortably beat a consensus call of 23.3 percent and the resulting $29.2 billion trade surplus topped a market expectation of $22 billion.
"I think the Chinese New Year effect only explains part of the story," Zhang Zhiwei, chief China economist at Nomura in Hong Kong, told Reuters. "After controlling for the Chinese New Year, the numbers are still very strong and show the economic recovery is on track."
Other data showed that headline inflationary pressure was subdued. Consumer prices rose 2.0 percent in January from a year earlier, bang in line with expectations and down from a seven-month high of 2.5 percent in December.
Investors bought the argument that an economic recovery that kicked off in the last few months of 2012 was intact. Stock prices in Australia and South Korea rose, despite pressure to take profits around the region ahead of next week's Lunar New Year lull, while oil and copper futures also gained ground.
Global markets have risen in anticipation of a surge in China's export growth as a signal of recovering demand in the giant economies of the United States and the European Union.
China's year-on-year exports growth to the United States of 14.5 percent was the strongest in 10 months, while the rise in exports to the European Union were the highest in 13 months at 5.2 percent.
Exports to China's neighboring economies in the Association of South East Asian Nations (ASEAN) leapt 48.6 percent versus January 2012, worth $20.1 billion. Continued...