china is ass-out

China’s Exports Decline by Most in Decade on Global Recession
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By Li Yanping and Nipa Piboontanasawat

Jan. 13 (Bloomberg) -- China’s exports fell the most in almost a decade in December as the deepening global recession cut demand for the nation’s toys, clothes and electronics.

Shipments dropped 2.8 percent, the customs bureau said on its Web site today. That compares with a 21.7 percent gain a year earlier. Exports grew 17.2 percent for all of 2008, down from 25.7 percent in 2007.

Waning export demand has led to protests by fired factory employees, an exodus of 600,000 migrant workers from the manufacturing hub of Guangdong, and an estimated urban unemployment rate of more than 9 percent. Premier Wen Jiabao pledged Jan. 11 to add to the nation’s 4 trillion yuan ($585 billion) stimulus package to create jobs and avoid social instability.

“There is little hope that exports will recover this year, as developed economies remain mired in recessions,” said Sun Mingchun, a Hong Kong-based economist at Nomura Holdings. “Textile, steel and electronic exports are the most badly hurt.”

The yuan fell to 6.8376 against the dollar from yesterday’s close of 6.8370, as of 3:38 p.m. in Shanghai. The CSI 300 Index of stocks declined 2.3 percent.

Exports to the European Union, China’s biggest export market, fell 3.5 percent in December from a year earlier. Shipments to the U.S. slipped 4.1 percent.

Tumbling Profits

Profits have tumbled for manufacturers with operations in China, such as Hon Hai Precision Industry Co., the world’s biggest contract maker of electronics. Hisense Group, a state- owned air conditioner and refrigerator maker, has reported plunging orders.

The export decline was less than the 5.3 percent median estimate in a Bloomberg News survey of 16 economists.

Imports plunged 21.3 percent, the biggest decline since Bloomberg data began in 1995, on waning demand for raw materials for manufacturing, leaving a trade surplus of $39 billion, the second-largest on record.

The surplus for all of 2008 climbed 13 percent to $295.46 billion, also a record.

Achieving the government’s 8 percent economic growth target for creating jobs and preventing social unrest will be “exceptionally arduous,” Liu Mingkang, the chairman of the China Banking Regulatory Commission, said in Beijing yesterday. Speaking in Switzerland, central bank Governor Zhou Xiaochuan said he too saw a risk of missing the goal.

Tiananmen Square Crackdown

Growth may slow to 5 percent this year, less than half of the 11.9 percent expansion in 2007, according to Royal Bank of Scotland Plc. That would be the weakest pace since 1990 and the aftermath of the Tiananmen Square crackdown. Growth was 9 percent in the third quarter of last year.

The central bank has cut interest rates five times from September, reducing the key one-year lending rate to 5.31 percent, and allowed lenders to set aside smaller reserves.

China is also aiding exporters by curbing currency gains that would make their products more expensive in overseas markets, restricting the yuan to a 0.5 percent advance against the dollar in the second half of last year after a 6.6 percent increase in the first.

The nation’s currency policy and trade surplus may exacerbate tensions with the U.S., which last month complained to the World Trade Organization that China was using prohibited subsidies to boost exports from apparel to high-tech electronics.

President-elect Barack Obama should press China to allow the yuan to appreciate because weakness in the currency is hurting U.S. jobs and manufacturing, according to Professor Peter Morici, from the University of Maryland’s Robert H. Smith School of Business.

Rising Unemployment

Shipments may fall 10 percent in 2009, Nomura’s Sun estimated, dragging down economic growth by 2.5 percentage points.

The state-backed Chinese Academy of Social Sciences forecast 9.4 percent urban unemployment by the end of 2008, to rise in 2009 as exports and production cool.

The central bank will keep the yuan trading within a narrow range against the dollar in 2009 to help exporters, Goldman Sachs Group Inc. said in a report yesterday.

“This is viewed as a critical issue for trade development in the face of unprecedented uncertainties in the global economy,” wrote Helen Qiao and Song Yu, Hong Kong-based economists.

The decline in exports was the biggest since April 1999.

To contact the reporters on this story: Li Yanping in Beijing at yli16@bloomberg.net
Last Updated: January 13, 2009 02:44 EST

Achieving the government’s 8 percent economic growth target for creating jobs and preventing social unrest will be “exceptionally arduous,” Liu Mingkang, the chairman of the China Banking Regulatory Commission, said in Beijing yesterday.

Swerve wrote:"Growth may slow to 5%"

"Shipments dropped 2.8 percent, the customs bureau said on its Web site today. That compares with a 21.7 percent gain a year earlier. Exports grew 17.2 percent for all of 2008, down from 25.7 percent in 2007."

Oh no! Growth in exports of 17% and a stabilising of record shipments volumes.

It's obviously not great news, but the rest of the world would kill for those figures.

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Aristotle wrote:hahaha

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Aristotle wrote:i'm going to take a shower. i have to get ready for class.

Aristotle wrote:i want a road-warrior thing to happen.

Aristotle wrote:i really believe i'm dead, and this world is to be my permanent punishment for some heinous transgression in a previous life.

thewalrus wrote:

Aristotle wrote:i'm going to take a shower. i have to get ready for class.

haha yeah. me too. Got to get down to Oceanography by 11. It fucking snowed a metric-fuckton last night. Snow everywhere. They had the graders out this morning. One of them almost ran over me.

Aristotle wrote:

thewalrus wrote:

Aristotle wrote:i'm going to take a shower. i have to get ready for class.

haha yeah. me too. Got to get down to Oceanography by 11. It fucking snowed a metric-fuckton last night. Snow everywhere. They had the graders out this morning. One of them almost ran over me.

at least you have that option, man.