Customs authorities predict that China's export trade will ease in the second quarter this year, despite weak January data. (Photo : REUTERS)
The General Administration of Customs (GAC) predicted that the downward pressures on China’s exports are expected to ease in the second quarter this year despite the weak January trade data released on Monday, Feb. 15, the seventh straight month of decline for exports, the Global Times reported.
Based on the leading index, China's exports in January stood at 31.7, the first time it increased from the previous month since Feb. 2015, indicating that downward pressure on China's exports will finally ease, GAC said.
In U.S. dollar terms, January exports dropped 11.2 percent from a year ago, and imports fell by 18.8 percent, the GAC data added.
Analysts had expected January exports to fall by 1.9 percent, while imports had been expected to drop by only 0.8 percent, following a decline of 1.4 percent and 7.6 percent in December, Reuters reported on Monday.
The report said that January's trade data indicates positive signs of the country's economic structural reforms.
In a statement posted on its website on Monday, GAC said that trade involving private companies hit 773.05 billion yuan ($119 billion), up 1.1 percent from 2015, accounting for 41.1 percent of the total, up 4.4 percentage points from the same period last year.
In comparison, foreign-invested companies in China and of state-owned enterprises (SOEs) have weaker trades as exports from foreign-invested companies dropped 12.3 percent in January, and SOEs fell by 15.7 percent.
"Small- and medium-sized form the bulk of private companies, and more easily adjust to demanding market conditions," Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Monday. "But many key exports, such as high-speed trains and nuclear power plants, can only be carried out by the SOEs."
Zhang Ning, a research fellow with the National Academy of Economic Strategy at the Chinese Academy of Social Sciences, said the Chinese government and the public prefer the performance of private companies in trade.
"The private sector's performance shows greater vitality from last year. In 2015, private companies accounted for 45.2 percent of the country's total exports, surpassing foreign-invested companies," Zhang said.
GAC added that exports of products from labor-intensive industries declined, which included textiles, costumes, mechanical and electronic products.
While imports of crude oil, coal and grain decreased in January, iron ore and refined oils imports increased in volume, the report said.
"Chinese manufacturers have to find their niche, competing in terms of quality against high-value products from manufacturers such as those from the U.S. and Japan, and competing in terms of costs against low-end products from manufacturers such as those in Vietnam," Bai said.
"Retail sales during the Spring Festival holidays increased by 11.2 percent from last year, which suggests consumption remains stable. And the slump in trade reflects fewer investments, possibly from weaker property investments and measures to reduce overcapacity," Japanese financial company Nomura said in a research note sent to the Global Times Monday.
According to experts, January trade reflected the growing trend in imports and exports seen in 2015.
From 2014 levels, China's trade slid by 8 percent in 2015, its worst performance since the global financial crisis.
A mixture of global and domestic factors continues to weigh trade down, Bai said.
"The economic performance of developed economies such as the U.S., the Europe, Japan and emerging economies such as Brazil and Russia are all far from encouraging, thus limiting demand," Bai said.
Trade in January with the EU, the U.S. and ASEAN economies declined by more than 14 percent, compared with the same period in 2015.
Experts said that external demand, the yuan's appreciation, rising domestic production costs and the plunge in global commodity prices will continue to weigh down China's trade performance.
Despite the trend, experts said more government policies are working toward a better and more vigorous business environment in China, and this year shows potential for growth.
"Industrial upgrades, urbanization and enhanced living standards will spur imports of more materials and products used in production or as daily consumption goods," Zhang said, adding that exports will be increased by products and technologies from the strategic emerging sectors and continued growth in e-commerce.
Zhang added that measures to stabilize trade must include the stabilization of the yuan, the further simplification of trade procedures, and the further harmonizing of the nation's initiative to build the overland and maritime Silk Roads in cooperation with other countries and regions.
