A man looks at rows of containers at the Yangshan deep water port off the coast of Shanghai, China, in this April 6, 2006, file photo. China's trade surplus plunged in February as sales of goods to the United States and Europe weakened and snowstorms disrupted the economy, the government reported Monday March 10, 2008, but analysts said it appeared to be a onetime drop and exports should rebound. (AP Photo/Greg Baker, File)

China Trade Surplus Drops, Exports Fall

JOE McDONALD | March 10, 2008 08:39 AM EST | AP

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BEIJING — China's trade surplus shrank in February as sales of goods to the United States fell, the government said Monday, but analysts said exports should bounce back now that winter storms that disrupted the economy have passed.

The 63 percent drop in the trade gap from a year earlier was due partly to a longterm slowdown in export demand, but February was an unusually weak month, analysts said.

"We expect the export figures to rebound in March, but continue to anticipate a more moderate slowdown in export growth over the course of the year," Jing Ulrich, JP Morgan's chairwoman of China equities, said in a report to clients.

February's trade surplus was $8.6 billion, down from $23.7 billion in the year-earlier period, according to China's customs bureau.

The data reflected slowing growth in exports to the United States and Europe while China's still-robust economy is driving demand for imported energy, consumer goods and industrial equipment.

China's imports in February surged 35 percent to $78.8 billion from the year-earlier period, according to the customs agency. The rate of export growth, meanwhile, plunged to 6.5 percent from January's 26 percent.

Exports to the United States fell 5 percent in February to $16.4 billion, while imports of American goods jumped 33 percent to $6.1 billion.

Beijing is under pressure from the United States and the European Union to ease trade barriers and currency controls that they say are adding to its swollen trade surplus. Some American lawmakers are calling for punitive action if Beijing fails to act.

Chinese leaders say they are not actively pursuing a large trade surplus. The communist government is prodding China's consumers to spend more in hopes of reducing reliance on exports and industrial investment to drive growth.

The February trade gap was the smallest since March 2007, but that month's $6.9 billion gap was considered abnormally low in a fluke caused by changes in export-tax policy. It has been two years since China regularly posted monthly trade surpluses under $15 billion.

Economists say narrowing the trade gap could help China restrain pressure for prices to rise by stanching the flood of cash coursing through the economy.

Consumer inflation rose to 7.1 percent in January, its highest level in 11 years, and is expected to surpass that when figures for February are reported Tuesday.

The six-month-old inflation spike has been limited mostly to food, but wholesale price data released Monday showed costs of industrial raw materials up sharply, suggesting pressure for across-the-board inflation might be increasing. Wholesale prices rose 6.6 percent in February, the fastest rate in more than three years, the government reported.

Regulators have repealed rebates of taxes on some exported goods and imposed curbs on exports of steel and other goods deemed too dirty or energy-intensive. The government also has restricted grain exports in an effort to rein in a rise in food prices.

The trade surplus with the 27-nation European Union, China's biggest trading partner, narrowed by 15 percent to $10 billion, according to the government data.

Chinese and EU officials are due to meet in April in Beijing to launch a regular high-level dialogue aimed at defusing trade tensions.

China holds similar twice-year meetings with senior American officials.

The U.S., EU and other trading partners are pressing Beijing to ease controls that they say keep its currency, the yuan, undervalued and give Chinese exporters an unfair price advantage.

Premier Wen Jiabao said last week that Beijing would pursue a more flexible exchange rate. The yuan has been allowed to rise by about 16 percent against the U.S. dollar since mid-2005, and a faster increase would help to narrow the trade gap by making China's goods more expensive abroad and making foreign imports more attractive to Chinese consumers.

But concern over possible job losses has prompted trade officials to argue against letting the yuan strengthen faster.

The sharp drop in export growth in February could add fuel to arguments by Chinese exporters that further loosening of exchange rate controls could wipe out thousands of jobs.

___

On the 'Net:

Chinese customs agency (in Chinese): http://www.customs.gov.cn


 
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We need this title;OIL PRICES FALL 50%, recovery could be possible if, 50% of troupes pulled out of Iraq, ALL MONEYS MUST BE BANKED IN USA, no outsourcing for at least 4 yrs. Buy only American made Electric vehicles. Immigration canceled for 4yrs. Borders tightly closed. Offering amnisty , to Tax paying Illegals. Rich pay fair share taxes. All lobbyist leave Washington....Congress responsible for thick books of bills..Must read all material that passes over their desk related to voteing. No Alcohol consumption while the peoples congress is in session. No gifts for elected officals, before and after...now folks, now you know what a major hardship is all about... We the people have been doomed to stark reality of Wal Mart, no credit,no oil for winter,no restraunts, gas guzzling cars, no ice creme cones for seniors...No trips to town, no credit cards, cat food cost more than steaks. All this pain for us. You were in charge where is your suffering?

    Favorite    Flag as abusive Posted 06:40 PM on 03/10/2008

YIKES!

Are you a "glass half full" or a "glass half empty" kinda guy?

Either way, you just made my faves list under the heading of ambiguous...

heh heh

    Favorite    Flag as abusive Posted 09:20 PM on 03/10/2008
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"Consumer inflation rose to 7.1 percent in January, its highest level in 11 years"

Notice how they buried this DEEP inside the article.

    Favorite    Flag as abusive Posted 04:43 PM on 03/10/2008

While the American tax payer digs deeper to put an extra dime of gas in the tank, there is an urgent need to become tougher on the enforcement of rules with Asian trading partners antipathetic to America.

http://pacificgatepost.blogspot.com/2008/02/americas-china-quandary.html

Once they become too powerful and influential, it will be too late to do anything. We have not reached that point quite yet.

    Favorite    Flag as abusive Posted 04:28 PM on 03/10/2008
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PGP haven't you noticed that China and Japan are the principal buyers of our debt? They are ALREADY powerful and influential my friend.

    Favorite    Flag as abusive Posted 04:45 PM on 03/10/2008

rethugs love to say 'libruls' are commies, all the while their politicians give their constituents childrens' job future to the actual communists. Frogs really do just sit there and boil and don't even know it.

    Favorite    Flag as abusive Posted 11:20 PM on 03/10/2008

" *Snap!* Just like that, huh?"

"In just one month, huh?"

"All because of the weather, you say?"

Bzzzzzttt ... Bzzzzzttt ... Bzzzzttt ... Oh, pardon Bzzzzttt... me, let me Bzzzzttt... get that...

Bzz... whew. Sorry about that.

Oh, what WAS that? Why, just my bullshit detector. It's been going off an awful lot these days, you know.

    Favorite    Flag as abusive Posted 02:54 PM on 03/10/2008
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ROFLMAO...good one, Sundial. I was wondering what that buzzing was!

    Favorite    Flag as abusive Posted 03:48 PM on 03/10/2008
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You ought to put that thing on vibrate. I for one know these days mine goes off all the time too...particularly since it's an election year.

    Favorite    Flag as abusive Posted 05:39 PM on 03/10/2008

I...just fell...outta my...chair...

ROFLMFAO!!!

A few years back I got "a wild hair up my backside" and called one of my Senators (sadly, they're both Repukes) concerning the rapidly deteriorating state of our national economy.

The "canned" response I got sounded something like this:

"Thank you for calling Senator ________'s office to voice your concerns. Your opinion is very important to him. As you know, we now live in a global economy, and...we now live in a global econony, an...we now live in a global econ...Global...Global...Global...Global...
urrrrrrrrrrrrrrrrrrrrrrrrzzzzzzzzzzzt! Thankthankthankthank youyouyouyou."

    Favorite    Flag as abusive Posted 09:12 PM on 03/10/2008
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"exports should bounce back now that winter storms that disrupted the economy have passed."

Sure, that was it. It has nothing to do with the fact that consumers are cutting back all.

    Favorite    Flag as abusive Posted 12:33 PM on 03/10/2008
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All consumers need now is their Bush tax stimulus check and all will be fine... in the Land of Nod.

    Favorite    Flag as abusive Posted 01:02 PM on 03/10/2008

I wonder if my "stimulus check" will cover the cost of one of them new-fangled BluRay DVD players WE ALL HAVE TO BUY now that Sony and Warner Studios have made our minds up for us...?

    Favorite    Flag as abusive Posted 01:16 PM on 03/10/2008

Greedy, I wonder if Bush is planning any bribes....er, stimulus checks for our Chinese buddies--I imagine they'll have few more zeroes.

    Favorite    Flag as abusive Posted 03:28 PM on 03/10/2008

Afternoon, mrc.

I got a snort out of that statement, too.

Also loved that last part about Chinese exporters being concerned this revoltin' development could cause job losses in THEIR OWN COUNTRY!

MAPS are "flat". The globe (of global economy fame) is "round".

    Favorite    Flag as abusive Posted 01:08 PM on 03/10/2008
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That's how we got mountains, EB, when flat maps got glued to a round earth, there was a lot of crumpled paper which made the hills and mountains and the torn paper made seas and rivers. Yuh-huh.

    Favorite    Flag as abusive Posted 03:51 PM on 03/10/2008
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The chinese have learned well from us. They have tons of cash to spare but will have their own "layoffs" now. I guess that's what happens when american companies set up shop in your country.

    Favorite    Flag as abusive Posted 04:25 PM on 03/10/2008

""exports should bounce back now that winter storms that disrupted the economy have passed."

Sure, that was it. It has nothing to do with the fact that consumers are cutting back all."

For once I agree with you. The dip had very little to do with the weather; there is enough of a lag between production, distribution and ultimately shipping before chinese goods reach US and EU ports that any effect of the February storms will be felt in March and april, not in February. Plus, teh storms occurred at Chinese New Year, when the factories are pretty much at a standstill because everyon ehas usually gone home anyway. The fact that everybody was stuck at train stations and not in tehir home provinces made no difference at all; the factories would have been closed anyway and the Chinese had already accounted for that with extra production in January and december. This was not an "unexpected shutdown" caused by the weather, it was a totally expected shutdown that happened to coincide with bad weather.

The myth of "decoupling" is just that: a myth. if China and India are the engine of growth, teh US and the Eu are the fuel tank. And the US is in teh process of picking itself up after teh bubble burst while the EU is at teh satge of collectively taking a deep breath before jumping off its own cliff and watching its economy burst worse than even the US economy did.

Venezuela, Algeria and Iran have effectively killed the golden goose, but Opec hasn't noticed the lack of eggs yet because they're still eating the roast goose. a lot of investors/funds are going to be in a world of hurt when the oil bubble bursts. Anyone old enough to remember what happened to gold the last time we had this sort of commodities bubble remembers how quickly that market can collapse.


    Favorite    Flag as abusive Posted 12:16 PM on 03/11/2008

Yeah, bounce right back...

Have they looked at the U.S. economy lately? This will bounce like a meat ball on a tile floor.

    Favorite    Flag as abusive Posted 09:54 AM on 03/10/2008

javaman, yep, you're right. Most of the things produced in China are geared toward the lower and middle class. Those two groups are being squeezed by rising food and energy costs and their credit is tapped out, they will be cutting back on Chinese imports.

    Favorite    Flag as abusive Posted 10:04 AM on 03/10/2008

BINGO! A ten minute "tour" through any Wal Mart or Dollar General Store will bear that out.

    Favorite    Flag as abusive Posted 12:18 PM on 03/10/2008
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