China’s import growth fell to a two- year low in December, underscoring a slowdown in the world’s fastest-growing major economy that deepens risks for the global outlook.
Imports rose 11.8 percent from a year earlier, less than all 21 estimates in a Bloomberg News survey of economists, a government report showed today in Beijing. While the moderation caused the trade surplus to widen to $16.5 billion in the month, officials have said the excess will shrink in 2012 as Europe’s crisis curbs demand.
“There will be a ripple effect on the rest of the world, particularly those who rely on China’s imports, such as commodity exporters,” said Zhang Zhiwei, chief China economist at Nomura Holdings Inc. in Hong Kong. “Growth in those economies will be adversely affected and the impact will become more visible in the first half.”
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Weakening import growth may undermine China’s ability to lead the recovery as it did after the 2008 crisis. The nation’s expansion may slide to 7.7 percent this quarter, the slowest pace in three years, according to a UBS AG forecast, and yuan gains may ease as policy makers protect exporters.
Stocks in China extended gains after the data. The benchmark Shanghai Composite Index rose 1.5 percent at the 11:30 a.m. local-time break. The yuan rose 0.04 percent to 6.3120 per dollar, ending a four-day decline, as the central bank raised the daily reference ratebefore U.S. Treasury Secretary Timothy F. Geithner meets Chinese officials in Beijing today.
Exports (CNFREXPY) in December rose 13.4 percent, in line with the median estimate in a Bloomberg survey, and the smallest increase since gains resumed two years ago after the financial crisis, excluding holiday distortions. The trade surplus compared with $14.5 billion the previous month and the median estimate of $8.8 billion in a Bloomberg survey.
Imports rose the least since gains resumed in November 2009. The slowdown may have been driven by lower prices, said Chang Jian, a Hong Kong-based economist with Barclays Capital. “Chinese demand is moderating but at a rather steady pace and has remained robust by international standards,” she said.
China’s Vice Commerce Minister Zhong Shan warned yesterday the country’s external trade environment may be “grimmer” this year as demand weakens and global competition intensifies, the official Xinhua news agency reported. Exports of labor-intensive goods are slowing “relatively quickly” and China is losing market share in Japan, the European Union and the U.S., he said.
Intensify Fine Tuning
Sportswear producers including Adidas AG are moving some production to Central America to be nearer the U.S. market and as labor costs in China rise. Adidas, the world’s second-biggest sporting goods maker, plans to increase its production in the region fivefold by 2015, the company said last month.