China: Trade surplus widens as imports slow in December
January 10, 2012
Exports continued to moderate in December, growing 13.4% over the same month the previous year, which was slightly below both November's 13.7% expansion and the 13.8% rise expected by the market. On the other hand, imports added 11.8% over the same month the previous year, which was well below both the 22.0% expansion recorded in November and market expectations of a 18.0% rise. As a result, the trade surplus widened from USD 14.6 billion in November to USD 16.5 billion in December, nearly doubling the USD 8.8 billion anticipated by market analysts. In the full year 2011, exports grew 20.3%, following a 31.3% rise in 2010, while imports expanded 24.9% (2010: +38.7% year-on-year). As a result, the trade surplus narrowed from USD 184 billion in 2010 to USD 158 billion in 2011, which represents the smallest surplus since 2005 and may help China to fend off pressures from the United States to strengthen the yuan. The People's Bank of China (PBOC) announced that its foreign exchange reserves declined in the fourth quarter for the first time since 1998. In the fourth quarter, foreign exchange reserves dropped by USD 20.5 billion (Q3: USD 4.2 billion increase) to USD 3.2 trillion. According to analysts, the decline was due to valuation effects of a weaker euro and capital outflows, amid persistent turbulences in international financial markets.