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China exports fall, but by lower rate

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

Exports fell 17.1 percent in March from a year earlier, the fifth straight monthly decline but less severe than February's 25.7 percent plunge, the sharpest in a decade, the General Administration of customs reported yesterday, adding that trade "showed clear signs of improvement."

"It says we're no longer in free-fall," economist David Cohen of Action Economics in Singapore told the Associated Press. "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 25.1 percent, widening the Chinese trade surplus to US$18.6 billion from February's US$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 the central government to launch a 4 trillion yuan (US$585 billion) stimulus plan to ease reliance on exports by pumping up domestic consumption.

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

Imports are expected to get a boost from the massive 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 US$90.3 billion, while imports were US$71.7 billion, the customs agency reported.

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

China's trade surplus with the 27-nation European Union was US$8 billion as exports plunged 20.2 percent to US$17.2 billion, while imports of European goods declined 17.4 percent to US$9.2 billion.

Shrinking external demand, the yuan's appreciation, trade protectionism and financing difficulties for small and medium-sized enterprises all put pressure on the country's foreign trade, Long Guoqiang, deputy director of the research department for foreign economic relations at the Development Research Center of the State Council, told Xinhua news agency.

A practical target for China is to make sure its export growth does not fall below the global average this year, Long said.


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