BEIJING • China's total trade fell in December but far less than expected, with exports outperforming many of its regional peers after the country let the yuan depreciate sharply, highlighting fears of a currency war among Asia's trade-reliant economies.
"The trade data supports our view that, despite turmoil in Chinese financial markets, there has not been a major deterioration in its economy in recent months," Mr Daniel Martin, senior Asia economist at Capital Economics, said in a note.
In US dollar terms, exports from the world's largest trading nation fell 1.4 per cent from a year earlier, data from the General Administration of Customs showed yesterday, much less than a Reuters poll forecast of an 8 per cent drop and moderating from November's 6.8 per cent decline.
They also sharply outperformed exports from neighbouring countries such as Taiwan and South Korea, analysts noted, and came in the face of entrenched weakness in overseas demand.
December imports fell 7.6 per cent, receding for the 14th straight month but not as sharply as feared, possibly due to factories stocking up on crude oil, iron ore and other materials as global resource and commodity prices continued to fall.
Indeed, China's crude oil imports hit a record high, while copper imports were the second highest on record.
Economists had forecast an 11.5 per cent import slide, after an 8.7 per cent drop in November.
The combination produced a US$60.09 billion (S$86.3 billion) trade surplus for December, compared with economists' expectations of US$53 billion, and November's US$54.1 billion.
"Another large trade surplus provides a cushion for the People's Bank of China in the face of soaring capital outflows," said Capital Economics' Mr Martin.
While Asian stock markets yesterday cheered the China data surprise, economists and the Chinese Customs department said exports will face further pressure this year due to sluggish global demand.
"Companies tend to have to fulfil their contracts by the year end... and they'll increase the amount they're exporting in December," Customs spokesman Huang Songping said. "This doesn't represent a trend (for 2016). In previous years, we've seen exports improve in December. The situation in the first quarter will be relatively severe."
Some economists also raised concerns that the better-than-expected export data could be partly due to currency speculators using false or exaggerated trade invoices to get capital out of China and evade further declines in the yuan.
For the full year, total trade was US$3.96 trillion, down 8 per cent from 2014 and China's worst performance since the global financial crisis. The government had started the year with a 6 per cent growth target.