China’s Trade Surplus Shrinks as Exports Plunge
March 11th, 2009Via: The Age:
China’s exports tumbled in February as the world’s third-largest economy felt the full force of the global financial crisis, but capital spending accelerated with the help of the government’s massive stimulus package.
With the world experiencing its deepest recession in decades, pessimists said the slump in exports was unlikely to end soon. Some said China could even record a trade deficit before long.
But optimists saw fresh hope in the more forward-looking investment data that China might pull out of its swoon faster than other major economies thanks to the government’s pump-priming and galloping credit growth.
“China has finally and spectacularly succumbed to the world financial crisis on the export side, and it’s difficult to see why that would improve in the short term,” said Paul Cavey, an economist at Macquarie Securities in Hong Kong.
Exports in February slid 25.7% to $US64.9 billion ($100 billion) from a year earlier, dwarfing forecasts of a 5% fall, while imports dropped 24.1% to $US60.1 billion, close to projections of a 25% decline.
The drop in exports was the steepest since bankers started keeping records in 1993.
