China Trade Falls Amid Weak Demand, Holiday

JOE McDONALD

BEIJING (AP) — China's trade suffered its biggest decline in January since the 2008 crisis — a new sign of weak global demand and a slowing domestic economy.

Exports fell 0.5 percent from a year earlier to $149.9 billion, while imports were down 15 percent at $122.7 billion, customs data showed Friday. China's politically sensitive global trade surplus tripled compared with a year earlier to $27.3 billion.

Analysts expected January trade to fall due to the Lunar New Year holiday, the country's most important holiday. Chinese exporters rushed out orders in December and then shut down for two weeks or more in January.

But the import decline was sharper than expected, suggesting that even with the holiday factored in, the world's second-largest economy is slowing markedly. China is a major buyer of iron ore, oil and other commodities and industrial components, meaning any downturn could hurt suppliers such as Australia, Brazil and South Africa.

"Such a dramatically low import number reflects extremely weak domestic demand, as investment slumps and drags on economic activity," said IHS Global Insight analyst Alistair Thornton in a report.

The Lunar New Year falls at different times during January or February each year, distorting trade figures. Analysts usually group the two months together and have said they will not have a clear picture until March.

China's export growth has declined steadily as Europe's debt problems and high U.S. unemployment hurt demand for goods. But January was the first outright contraction compared with a year earlier since the 2008 crisis.

Import growth has weakened as Beijing tightened lending curbs to cool an overheated economy and export industries bought less imported raw materials and components as foreign orders weakened.

China's rapid economic growth eased to a 2 1/2-year low of 8.9 percent in the final quarter of 2011, down from 2010's 10.3 percent.