GLOBAL CRISIS TAKES TOLL ON CHINA AS EXPORTS, IMPORTS PLUNGE
Ariana Eunjung Cha
Ariana Eunjung Cha
The Washington Post, February 12, 2009
China's exports dropped 17.5 percent and imports plunged 43 percent in January from the same month a year earlier, underscoring just how quickly its once-white-hot economy is slowing down and adding to the threat of further unemployment and social unrest.
Economists were quick to point out that the numbers released by the government customs office were heavily distorted by the fact that this year the weeklong Lunar New Year, China's most important holiday, fell in January while it was in February last year. Nonetheless, the drop was significantly more than the 12 to 14 percent expected by many analysts and much sharper than the 2.8 percent drop seen in December.
"[T]he underlying trade numbers suggest that the worst of both external and domestic demand is not yet over," Tao Wang, head of China economic research for UBS Securities, wrote in a research note to clients yesterday.
The deteriorating global economy has been devastating to Chinese exporters. Tens of thousands of factories in the southern manufacturing belt have closed down in recent months, leaving what the government estimates to be 20 million newly jobless migrant workers.
The data released yesterday show that while shipments to the world's largest economies fell significantly -- down 17 percent to the European Union, 10 percent to the United States and 9 percent to Japan -- shipments to China's neighbors plunged even more. Exports to the countries that make up the Association of Southeast Asian Nations were down 22 percent.
Denise Yam and Qing Wang of Morgan Stanley pointed out in a research note that because much of the trade between Asian producers is components and semi-manufactured goods, "further weakness can be expected from trade numbers out of the Asian exporters in the next few months."
China's exports dropped 17.5 percent and imports plunged 43 percent in January from the same month a year earlier, underscoring just how quickly its once-white-hot economy is slowing down and adding to the threat of further unemployment and social unrest.
Economists were quick to point out that the numbers released by the government customs office were heavily distorted by the fact that this year the weeklong Lunar New Year, China's most important holiday, fell in January while it was in February last year. Nonetheless, the drop was significantly more than the 12 to 14 percent expected by many analysts and much sharper than the 2.8 percent drop seen in December.
"[T]he underlying trade numbers suggest that the worst of both external and domestic demand is not yet over," Tao Wang, head of China economic research for UBS Securities, wrote in a research note to clients yesterday.
The deteriorating global economy has been devastating to Chinese exporters. Tens of thousands of factories in the southern manufacturing belt have closed down in recent months, leaving what the government estimates to be 20 million newly jobless migrant workers.
The data released yesterday show that while shipments to the world's largest economies fell significantly -- down 17 percent to the European Union, 10 percent to the United States and 9 percent to Japan -- shipments to China's neighbors plunged even more. Exports to the countries that make up the Association of Southeast Asian Nations were down 22 percent.
Denise Yam and Qing Wang of Morgan Stanley pointed out in a research note that because much of the trade between Asian producers is components and semi-manufactured goods, "further weakness can be expected from trade numbers out of the Asian exporters in the next few months."
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