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Business / Opinion

China's trade engine

(China Daily) Updated: 2014-02-13 07:36

The better-than-expected trade growth in January does not necessarily guarantee a strong sustained start in 2014, because the Lunar New Year, which fell at the end of January this year, makes the trade figures volatile at the start of each year.

But it does amount to a serious challenge to exaggerated pessimism, which not only prematurely takes for granted a slowdown of the world's second-largest economy, but also mistakes it for an imminent threat to the fragile global recovery.

The latest statistics show China's exports rose 10.6 percent year-on-year in January, more than double the 4.3-percent growth in December, while imports were up 10 percent.

Such double-digit growth in trade figures has surely come as an upbeat surprise when the market generally expected flat growth.

Given that China has considerably cut its dependence on exports as a key driver for growth in recent years, it is far from certain if accelerated trade growth will be enough to assure similar expansion of the overall economy.

Recent reports that the stocks of iron ore in Chinese ports are approaching a record high of 100 million tons do not bode well for investment growth. But in the meantime, strong consumption growth during Spring Festival is clear evidence of the ever-growing role Chinese consumers are playing in driving domestic economic growth.

In the absence of investment and consumption data, one should definitely not read too much into a single month's trade figures.

Yet, the fact that China's $4-trillion trade engine, probably the world's largest, is humming soundly should be enough to call into question the strange pessimism about the Chinese economy.

Since China registered a 7.7-percent GDP growth last year, some people have seized on the fact it is the slowest expansion in more than a decade to fuel fears that an unstoppable slowdown of the fastest-growing major economy will dent global demand and affect the global recovery.

It is one thing to forget the performance of many other catch-up economies which indicates it is all but inevitable for China to experience some slower growth after explosive growth for more than three decades.

It is another thing to spread groundless pessimism in the face of the growing size of the world's second-largest economy which has adequately enabled it to contribute more to the global recovery even with less growth at home.

January's trade figures have explicitly proved both the resilience of China's export sector and its increasing contribution to global demand.

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