China’s exports slow as Germany’s grow

By editor on Jan 11, 2012

The latest trade figures from China are being seen as evidence that its economy is slowing down whilst its trade surplus may be shrinking.

The figures released by the Chinese General Administration of Customs for December showed both lower import and export growth, with imports growing by 11.8% year-on-year as compared to November's figure of 22.1%. The figure for exports was a year-on-year growth of 13.4%; which is roughly flat over the past 12 months.

These numbers might suggest that the Chinese economy is not merely seeing lower levels of growth in its export activity, driven by lower consumer demand in Europe and the US, but is also seeing reduced growth of consumption within China. Of course such figures should be approached with caution as anomalies frequently appear on a month to month, or even quarterly basis. However, the export figures, in particular, do suggest that traffic out of China is likely to be slowing considerably; both now and in the near future.

In contrast, German trade figures published on Monday (9/1/2012) by the Federal Statistical Office show an economy aggressively growing exports. Year-on-year German exports increased by 8.3% and compared to the previous month they grew by 2.5%. However, imports actually shrank by 0.4%.

Anecdotal evidence suggests that German companies are achieving a high degree of penetration into the Chinese market and not just in capital goods. Volkswagen's recent results saw strong sales in China, both in terms of cars manufactured in China, but also more expensive models imported into the country. This suggests that Volkswagen and other global vehicle manufacturers have established a tight grip on China as a market at the expense of the smaller more fragmented Chinese producers.

It is easy to get carried away on these numbers. They are highly tentative and prone to significant instability. Overall the figures show that demand in many large economies is slowing, not just in the developed world, but also in key emerging economies such as China. However, it might also be possible to discern the beginnings of a change in patterns of trade as the West shifts to becoming more of a producer and less of a consumer in the global economy.

Content provided in partnership with Transport Intelligence.