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Foreign trade drops by 9.8%

By Zhong Nan | China Daily | Updated: 2016-02-16 08:02

Expert blames weak manufacturing and housing market for the decline

China's foreign trade fell by 9.8 percent year-on-year to 1.88 trillion yuan ($288 billion) in January, according to customs data on Monday.

Exports dropped by 6.6 percent from the same month last year and imports declined by 14.4 percent.

The foreign trade surplus widened to 406.2 billion yuan in January from 382 billion yuan a month earlier, according to the General Administration of Customs.

The leading index for China's exports stood at 31.7 in January, the first month-on-month increase since February last year, signalling less export pressure in the second quarter of this year.

China's exports to its top three trading partners fell last month.

Exports to the European Union dropped by 7.4 percent, those to the United States declined by 5 percent, while exports to the Association of Southeast Asian Nations fell by 13.5 percent.

Zhao Zhongxiu, a trade professor at the University of International Business and Economics in Beijing, said weak manufacturing activities and a bearish housing market had triggered a decline in domestic demand for commodities, including refined oil, industrial metals and plastics.

"The trade surplus, combined with a downturn in exports and imports, complicates the country's ongoing effort to readjust its industrial structure," Zhao said.

With exports reaching 567.6 billion yuan, companies in the private sector saw export growth of 1 percent in January.

This was thanks to their diversified marketing strategies, including e-commerce platform development and moving some manufacturing facilities overseas, fast product transformation and upgrading under current global market conditions.

Zhang Jianping, director of the International Economic Cooperation Institute at the National Development and Reform Commission, said, "As a large number of factories will restart their operations after Spring Festival, China's foreign trade is likely to rebound during the second quarter."

Huo Jianguo, former president of the Chinese Academy of International Trade and Economic Cooperation, a Ministry of Commerce think tank, said financial institutions should offer more capital assistance to enterprises through orders and better performances.

"China needs to continue putting forward support measures for foreign trade to maintain moderate growth. Otherwise, declining trade will have a negative effect on the country's economic growth, especially for its State-owned enterprises," Huo said.

Developed nations - eager to compete with China through modern manufacturing business - have revitalized their exports with reindustrialization and trade protection policies.

In the past five years, China has been losing advantages - including skilled labor, sound infrastructure and industrial facilities - as many industries and orders move to other markets, including Southeast Asia and India.

zhongnan@chinadaily.com.cn

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