If Europe isn't buying, China isn't selling.
Export figures for March released Tuesday show that China's trade with the world, and most particularly Europe, is slowing.
Chinese exports and imports are still rising, but at a dramatically slower pace. Exports increased at an annual rate of 8.9 per cent in March, compared with the same month last year. That follows a gain of 18.4 per cent in February.
For the first three months, exports totalled $430-billion (U.S.), an increase of 7.6 per cent – the smallest quarterly increase in a year.
Chinese officials say the country's exports are likely to increase at a 10-per-cent pace this year, or about half the pace of 2011.
The biggest drag on Chinese exports is Europe. Exports to the European Union fell 3.1 per cent in March.
"That's not surprising, given that parts of Europe are in recession," said John Weekes, a former top Canadian trade official and now a consultant at law firm Bennett Jones in Ottawa.
"It's pretty hard to separate the shifting global trade winds from the global economy. And to a large extent, what's happening in trade is a function of how individual economies are performing."
With the exception of Germany, Europe is suffering the aftershocks of the debt crisis and government austerity.
The U.S. economy, on the other hand, is doing better, paced by a rebound in auto sales and production. Chinese exports to the U.S. expanded 14 per cent in March.
China sold more to the U.S. than to the European Union – traditionally its No. 1 export market – for a second consecutive month in March, pointed out Mark Williams, chief Asia economist at Capital Economics in London.
"The U.S. looks very likely to supplant the EU as China's largest export market across the whole of this year," Mr. Williams said.
Overall, China posted a trade surplus of $5.3-billion in March, reversing a $31.5-billion deficit in February.
Trade was a net drag on growth last year as China turned in its slowest rate of expansion since 2009, at 9.2 per cent, with each quarter's growth in 2011 successively weaker than the previous three months.
Analysts surveyed by Reuters are forecasting an average growth rate of 8.3 per cent in China this year. That would be the slowest pace in a decade.