The power of the iPhone helped ease even the ill trade winds blowing from Europe for Chinese manufacturers last month, one of many factors in a surprise burst in export growth in the last days of 2012.
China’s export growth of 14.1 per cent in December and import growth of 6 per cent came in stark contrast to November’s lacklustre performance, when exports crept up a mere 2.9 per cent and imports were flat. Economists have credited everything from pre-Christmas smartphone releases – including Apple’s iPhone 5 – to the rush of shipping after a California ports strike for the surge.
But analysts also warn of data distortions, with growth in container shipping not matching reported export volumes, and seasonal blips from Christmas and the coming Chinese New Year. With credit also tightening, the numbers are unlikely to boost forecasts on China’s overall economic growth.
“I think our view is we would probably not base our projections for overall export growth in 2013 based on one month,” said analyst Ren Xianfang at IHS Global Insight in Beijing. “Over all, 2012 was very weak and showed a lot of volatility, and I think that’s something we have to bear in mind.”
At UBS, economist Wang Tao warned of both seasonal distortions still ahead for January and February, and suspicions that some exporters in special economic bounded areas inflated December numbers to take advantage of tax rebates.
“The strength of December exports was surprising and brought some concerns on the quality of the data,” she wrote. “For example, growth of container throughput in December did not accelerate as export volume did.”
Customs administration officials said they expected China’s trade to be “slightly better” this year than last. The country’s global trade surplus last year rose 49 per cent, to $231.1-billion (U.S.). Its trade surplus with the United States is also up, to $218.9-billion for the year.
The United States replaced struggling Europe as China’s largest trading partner last year, receiving exports worth $351.8-billion, just exceeding the $334-billion to the European Union.
Exports to Southeast Asia also jumped 27.8 per cent, up from 19.3 per cent the previous month.
“There were signs of strengthening developed world demand in China’s latest export data,” wrote Mark Williams of Capital Economics. “Stronger growth in China is being reflected in rising imports. But with credit growth levelling off, a strong and sustained economic rebound does not seem likely.”
Warning that commodity import values are still weak, and with China’s trade surplus expanding, Mr. Williams predicted a return to People’s Bank purchases of foreign currency.
The data come as analysts prepare their own China growth forecasts for 2013, numbers buoyed by manufacturing and exports as well as government-driven investment in infrastructure. The government-set target for 2012 was 7.5-per-cent GDP growth, though policy makers routinely set targets they expect to exceed and the year-end number, expected next Friday, is likely to reach 8 per cent.
The World Bank predicts 2012 growth to end at 8 per cent for the year, with 2013 coming in around 7.5 per cent. Private economist forecasts range from a low of 6 per cent to well over 8 per cent, all citing continuing investment by government as both a driver and threat to the country’s economic health.
“Our core scenario is that China will grow by 7.4 per cent in 2013,” Patrick Legland, head of research at Société Générale, said in a note to clients. “There is still a chance however that China could land hard, with growth of less than 6 per cent. China is enjoying a cyclical recovery, and worries about a hard landing have dropped down investors’ list of global concerns. This could be a mistake.”Report Typo/Error