China's Export is Shrinking

In December, China recorded a trade surplus of US$38.9 billion. However, China's exports shrunk tremendously, particularly to the United States, providing evidence that worldwide recession is damaging the economic growth of world's second-largest economy.
Anna Fedec, 1/14/2009 7:07:23 PM

According to the released report, exports growth softened to -2.8% year on year from -2.2% in November.
Still, the biggest concern we have is ongoing deterioration in imports growth. Indeed, because China imports a lot of components, assembles them and sends to other countries, the softening in imports growth may be an indicator of further drop in exports. For example, South Korea and Taiwan, the third and fourth biggest importers to China last year, saw exports in December plunge by 17 per cent and 42 per cent respectively.