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China’s trade decline eases in March

BEIJING - The plunge in Chinese exports that has wiped out millions of jobs eased in March amid signs the collapse in global demand might be bottoming out.

Exports fell 17 percent in March from a year earlier, the fifth straight monthly decline but less severe than February’s 25.7 plunge, the sharpest in a decade, the customs agency reported Friday. It said trade ‘showed clear signs of improvement.’

‘It says we’re no longer in freefall,’ said economist David Cohen of Action Economics in Singapore. ‘It’s still down sharply year-on-year. But it’s an optimistic sign for the Chinese economy as well as the whole world.’

Imports fell by 25.7 percent, widening the Chinese trade surplus to $18.6 billion from February’s $4.8 billion gap.

The plunge in demand for Chinese goods has thrown at least 20 million people out of work as factories closed, prompting Beijing to launch a huge stimulus plan to ease reliance on exports by pumping up domestic consumption.

A survey of Chinese companies released last week showed manufacturing expanding slightly in March following a months-long contraction. It also showed the drop in export orders was easing.

Beijing has taken steps to hold down the price of exports by cutting taxes on exporters and stopping the rise of China’s tightly controlled currency, the yuan, against the U.S. dollar. Economists say both steps could strain relations with trading partners if China is seen to be competing unfairly.

The continued weakness in imports will hurt other Asian economies, which supply Chinese factories with raw materials and industrial components. But analysts say imports should pick up as factories run down stockpiles of materials and need to buy more.

Imports are expected to get a boost from the 4 trillion yuan ($586 billion) stimulus package, which aims to pump money into the economy through higher spending on construction of airports and other public works. That is expected to drive demand for materials such as imported iron ore to produce steel.

‘Export activity showed signs of stabilization, reflecting modest improvement in global demand,’ Jing Ulrich, chairwoman of China equities for J.P. Morgan, said in a report. ‘There are some initial signs of recovery in China’s raw materials demand, driven by government stockpiling and record imports of iron ore.’

China’s global exports in March totaled $90.3 billion, while imports were $71.7 billion, the customs agency reported.

China posted a $10.2 billion trade surplus with the United States as exports to the U.S. market fell 12.6 percent to $16.4 billion, while imports of American goods dropped 12.7 percent to $6.2 billion.