China faces more pressure as Nov imports shrink unexpectedly, exports slow

Mon Dec 8, 2014 1:47am EST
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By Kevin Yao

BEIJING (Reuters) - China's imports shrank unexpectedly in November while export growth slowed, fuelling concerns the world's second-largest economy could be facing a sharper slowdown and adding pressure on policymakers to ramp up stimulus measures.

Exports rose 4.7 percent from a year earlier, while imports dropped 6.7 percent, the biggest drop since March, data released by the General Administration of Customs showed on Monday.

That left the country with a record trade surplus of $54.5 billion, which analysts say could increase upward pressure on the yuan CNY=CFXS even as exporters are struggling.

Economists polled by Reuters had expected exports to grow 8.2 percent, a 3.9 percent rise in imports and a trade surplus of $43.5 billion, all slowing from October.

"Despite another record surplus, the details paint a grim picture with slower export growth and a contraction in commodity imports in volume terms," said Andy Ji, senior currency strategist at Commonwealth Bank of Australia in Singapore.

Exports have been the lone bright spot for China's economy in the last few months, perhaps helping to offset soft domestic demand, but there have been doubts about the accuracy of the official numbers amid signs of a resurgence of speculative currency flows through inflated trade receipts.

Dariusz Kowalczyk at Credit Agricole CIB in Hong Kong said over-reporting in exports may have been curbed in November, which contributed to a weaker reading. But he added that the import contraction was "shocking", reflecting not only lower commodity prices but poor domestic demand.

"This means that pressure will rise on the government to do more to stimulate growth," he said.   Continued...

Trucks drive past piles of shipping containers at the Qingdao port in Qingdao, Shandong province June 8, 2014. REUTERS/China Stringer Network