February Exports Drop by 25.7 Percent
Mar. 12 – China’s General Administration of Customs released the figures for February showing that exports plunged by 25.7 percent to US$64.9 billion compared to last year.
It is the largest decrease in more than a decade and the fourth monthly decline in a row, reports China Daily. Imports were also not spared as figures dropped by 24.1 percent to US$60.05 billion while trade surplus came in at US$4.8 billion, compared to January’s US$39.1 billion.
“The figure is worse than it appears as the timing of the holiday should have made January’s numbers look bad and February’s numbers look good,” Ben Simpfendorfer, an economist in the Hong Kong office of the Royal Bank of Scotland told the New York Times referring to the Chinese new year that came in late January this year compared to the previous February.
Ever since market reforms thirty years ago, exports have been the foundation of China’s economic success. The global finance crisis dealt a huge blowto the industry when international markets cut demand leading to an estimated 20 million migrant workers becoming unemployed.
The government has already released an economic stimulus plan that aims to offset weakening export demand although it is still not clear if it would succeed in keeping the GDP rate at 8 percent.
Much of this money is being spent on fixed-asset investment. According to the National Bureau of Statistics, fixed-asset investment rose by 26.5 percent in the first two months of 2009, higher than previous years.
The government will be using the money to improve on various infrastructure including railroad investment spending. Railroad construction more than tripled in the months of the year.