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China reports mixed trade figures China 'overtakes' US as world’s largest goods trader
(about 3 hours later)
China has reported better than expected growth in imports for December, helping cushion concerns of a weaker than forecast rise in exports. China has claimed that it is "very likely" that it overtook the US as the world's top trading nation, a title US has held for decades.
Imports jumped 8.3% from a year earlier indicating strong domestic demand. According to the latest data, China's total trade grew at an annual rate of 7.6% to $4.16tn (£2.5tn) last year.
Exports rose by a weaker than expected annual rate of 4.3%. That marked a slowdown from the 12.7% annual growth in November. The US is yet to release it full-year figures, but its trade for the first 11 months of 2013 totalled $3.5tn.
Analysts said that while exports had weakened, strong domestic demand would help sustain growth in China's economy. China became the world's biggest goods exporter in 2009. Its imports have also risen amid an expansion in its economy.
"This indicates that domestic demand is not as soft as had been feared, and the Chinese economy - while decelerating - is unlikely to see a sharp slowdown," said Dariusz Kowalczyk, an economist with Credit Agricole CIB in Hong Kong. "It is very likely that China has overtaken the US to become the world's largest trading country," said Zheng Yuesheng, a spokesman for China's customs administration.
"The data is positive for China and Asia sentiment as it alleviates concerns that China is slowing too sharply." The US is scheduled to release its full-year figures next month.
Government support Concerns over data
For the full year, China's exports rose at an annual rate of 7.9% in 2013. However, there have been concerns in recent months over the accuracy of China's export data.
The export and manufacturing sectors have been key drivers of China's growth for decades. There has been speculation that some Chinese exporters may be overstating their shipments in an attempt to bypass restrictions on bringing funds into the country.
However, a slowdown in demand from key markets impacted their growth rate in recent years. For their part, Chinese policymakers have taken measures to counter the problem.
As a result, China's policymakers have announced various steps aimed at sustaining growth in these sectors. The measures include tax breaks for small businesses and reduced fees for exporters. In May last year, the State Administration of Foreign Exchange (SAFE), China foreign exchange regulator, said it would increase its scrutiny of export invoices and impose tougher penalties on firms providing false data.
Analysts said the measures, coupled with a recovery in markets such as the US, were likely to help lift exports in the current year. Sun Junwei, China economist at HSBC in Beijing, said the "recent measures could be working to squeeze out these fake trade activities".
"We expect exports to show further recovery in 2014, but the magnitude would be small and at around 10%," said Sun Junwei, China economist at HSBC in Beijing. "We actually think these activities would be relatively contained this year compared with last year," she said.
Some analysts also said that even if the issue of inflated numbers was taken into account, China would still take the top spot from the US.
"The gap between the overall trade of China and the US is likely to be almost $250bn in 2013," Rajiv Biswas, chief economist Asia-pacific at IHS, told the BBC.
"That is a significant difference and it is unlikely that any adjustment to the final figures will alter the position of the two countries."
Mr Biswas added that the gap between the two countries was likely to become even wider in the current year.
For the full year, China's exports rose at an annual rate of 7.9% in 2013, while imports grew 7.3%.