Chinese exports ended 2012 surprisingly strongly, but economists expect the rebound to be short-lived.
Year-over-year growth of 14 percent in December took export expansion for the year to 7.9 percent — down on the government target of 10 percent, but much higher than many analysts expected after growth over the first eight months of last year of just 6.2 percent. The median forecast of 25 economists polled by Reuters recently, for example, predicted Chinese exports would grow just 4 percent in December compared to a year ago.
Xianfang Ren, senior China economist at IHS, said China’s exports had performed better last year than during previous downturns. “Put in perspective with the four previous export downturns, 2012 looks to have done quite well — exports grew only 0.5 percent in 1998 after the Asian Financial Crisis, 6.8 percent after the U.S. tech bubble crash in 2001 and plunged over 16 percent in 2009 amid the Global Financial Crisis,” he said.
However, Xianfang warned that the demand outlook for 2013 remained fragile, with the volatility of trade data last year, especially in the second half, pointing to weak fundamentals on the demand side where short-term export orders have been prominent.
“Further, we understand there has been a notable amount of rushed shipments and even faked exports to secure tax refunds,” he said. “This will die down in the new year.”
“We tend to hold greater belief in the transaction data from the Canton Fair last autumn, which showed continued declines in exports orders by about 9 percent. With our projection for continued contraction in the Eurozone and continued slowdown in the U.S. economy, we believe China’s export sector will face another uphill battle this year — an even tougher one than 2012.”
Zhiwei Zhang, chief China economist at Nomura, predicts China’s exports will be “lackluster” for the next two years, rising just 4.8 percent in 2013 and 6 percent in 2014.
Louis Kuijs, RBS China economist, said a weak global demand environment will see the export sector “challenged” in 2013, although imports will pick up on the back of strong domestic demand.
“The export situation remains quite weak. The government is trying to help exporters, but they can’t do that much when global markets are weak,” he added.
The World Bank said China’s GDP grew 8 percent in 2012 and will grow 7.5 percent this year.
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