Economic review

Jan sees record import rise

2018-02-09 09:55:00 (Beijing Time)         Global Times

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Efforts needed to ensure more balanced trade

Strong internal demand has helped the Chinese central government's policy of boosting imports, as China reported a record 30 percent surge in import volume in January, along with a massive drop in the trade surplus.

China's foreign trade volume rose 16.2 percent year-on-year in January to 2.51 trillion yuan ($397 billion), the General Administration of Customs (GAC) said in a press release on Thursday.

January exports grew 6 percent year-on-year to reach 1.32 trillion yuan, while imports surged 30.2 percent to stand at 1.19 trillion yuan, GAC data showed. The trade surplus fell by 59.7 percent in January to 135.8 billion yuan.

In 2017, Chinese exports grew 10.8 percent year-on-year while imports grew by 18.7 percent. The trade surplus in 2017 fell by 14.2 percent to 2.87 trillion yuan.

There is a base figure influence, as the weeklong Spring Festival holidays took place in January in 2017 and reduced economic activity, but the January 2018 trade data still showed some interesting trends, experts said.

Tang Jianwei, chief macro analyst with Bank of Communications, said the data reflected the changes in China's trade policy.

"The Chinese government intends to boost imports, in order to actively address the trade imbalance between China and its trading partners, and what we see in the January trade data is that this initiative has yielded results, boosted by the strong internal demand," Tang said, adding that the change will also ease the pressure from rising trade frictions.

At the Central Economic Work Conference held in December last year, the central government said it would lower the import tariffs on some products and expand imports to promote more balanced trade.

Domestic demand

With China's independent refiners having received larger import quotas, imports of crude oil have surged by 19.6 percent to a record 40.64 million tons since March 2017.

Boosted by the strong demand in the country's huge livestock sector, the imports of soybeans also jumped in January, increasing by 11 percent year-on-year to 8.48 million tons.

China's coal imports reached their highest level in four years, as the nation imported 27.81 million tons of coal in January, up 11.5 percent year-on-year.

Tang said the robust internal demand and the rise in the yuan, which strengthened against the U.S. dollar by 3.5 percent in January, had fueled the growth in imports.

The 30.2 percent rise in imports in January was in stark contrast to a forecast made by a Bloomberg survey last year, which predicted a rise of just 5 percent in 2018. Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, noted that the wide difference in the growth rate of exports and imports is worth attention, arguing that the two should be at an equal level.

Bai cited two sets of comparable data from Vietnam and South Korea, which also have trade data that is influenced by the Spring Festival holidays.

Vietnam saw exports rise by 33 percent and imports by 47 percent in January, while South Korea's January exports rose 22 percent with imports rising 20 percent.

"This means China's January figures, in which import growth was five times that of exports, are extraordinary. More measures are needed to boost exports," Bai told the Global Times on Thursday.

Bai said that in addition to the central government's desire to tame the trade surplus, a number of other factors contributed to the wide gap between imports and exports.

"The changing roles in global labor distribution and the fact that China sticks to an open economy amid a rising trend of trade protectionism globally and shares its growth opportunities with its partners are all contributing to the wide gap between export and import growth," Bai said.

While a single month's data is too weak to support any predictions, it can be expected that China's 2018 trade surplus will decrease marginally, Bai said.