BEIJING • China posted much stronger-than-expected trade data last month as demand picked up at home and abroad, an encouraging start to the year for the world's largest trading nation even as Asia braces itself for a rise in US protectionism under President Donald Trump.
Led by electronics, China's exports last month climbed the most in nearly a year, adding to evidence that Asia's long trade recession may be bottoming out. Shipments last month rose 7.9 per cent to US$182.8 billion (S$260 billion), more than twice as much as expected, after exports last year slumped nearly 8 per cent.
Officials at the Customs bureau said imports also exceeded expectations, rising 16.7 per cent to US$131.4 billion. They rose at the fastest pace in four years last month, fuelled by a continued construction boom which is boosting demand and global prices for resources from copper to steel, preliminary Customs data showed yesterday.
The trade surplus climbed to US$51.35 billion, beating economists' estimates by more than US$2 billion. Last week, a reading on factory activity for last month indicated the manufacturing sector was stabilising.
"Chinese trade values have been picking up in recent months, thanks to a revival in global manufacturing, the continued strength of China's domestic economy and the rebound in global commodity prices," said Mr Julian Evans-Pritchard of Capital Economics.
China watchers warned the long Chinese New Year holidays may have distorted the data to some degree, with companies pumping up production or rushing to build inventories before the break, which can last for weeks.
But most economists agreed the trend backed the view that manufacturing demand is improving in China and globally.
"The strong data was related to the global pick-up in growth in the US, Europe and also emerging economies," Mizuho Securities chief Asia economist Shen Jianguang told Bloomberg News.
But Nomura analysts said it can also be explained by a weakened yuan, which has made Chinese exports more affordable. The yuan, or renminbi (RMB), is wallowing near eight-year lows against the greenback as a weaker Chinese economy and the prospect of better returns in the US lures investors to withdraw their cash from the country. Exports, Nomura said in an analyst's note, "are benefiting from the depreciation of RMB's real effective exchange rate over previous quarters".
Mr Trump criticised China, Japan and Germany last week, saying the three key US trading partners were engaged in devaluing their currencies to the harm of US companies and consumers. But he has not followed through yet on threats to label China a currency manipulator and slap heavy tariffs on Chinese goods.
"China's trade data is going to be pretty good in the first part of this year because of the very good run that we had in the last part of 2016," said Mr Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong. "The worry we have is really about US trade policy, which is undeniably turning more protectionist... It is pretty obvious to me that the climate for exports to the US is going to be much harsher in the coming years."
REUTERS, AGENCE FRANCE-PRESSE