China’s economic rebound was evident as the first hard economic numbers of the year, released on Friday, showed a surge in exports and imports that was not solely explained by the timing of the Lunar New Year holiday. Exports grew 25 per cent year-on-year in January versus a forecast of 17 per cent in a Reuters poll, while imports surged 28.8 per cent to comfortably beat a consensus call of 23.3 per cent. January’s trade surplus was $US29.2 billion versus a market expectation of $US22 billion.
“I think the Chinese New Year effect only explains part of the story,” Zhang Zhiwei, chief China economist at Nomura in Hong Kong, said. “After controlling for the Chinese New Year, the numbers are still very strong and shows the economic recovery is on track.” Global markets have been buoyed in part by expectations of a surge in China’s export growth and an easing of inflation to 2.0 per cent from December’s seven-month high of 2.5 per cent when January data are published.
China publishes the bulk of its economic data for January and February combined in March to smooth the effects of the annual shift in the Lunar New Year holidays when many factories shut for at least a week and often longer. The holiday fell in January in 2012 and will be in February this year. Meanwhile the easing of inflation forecast for January is not expected to persist, with a rebound seen building alongside the broader economic bounce – albeit not one that is likely to be strong enough to breach 3.5 per cent, a level that economists think the government will soon announce as its 2013 target.
China New Generation Management Research Group 