China?s Exports Rise 46 Percent As Consumer Demand Renews

China announced yesterday that its exports climbed 46 percent in February from a year earlier. Economists said the data signals a rebound in consumer demand from the US and other Western markets after last year?s financial crisis.

It was the third straight month of increases in China?s exports, and the fastest growth in three years. Orders from the US, European Union and Japan accounted for almost half the growth, following a pick-up in demand from emerging markets in the previous two months.

China?s imports also rose 45 percent over the previous year, led by crude oil as factories stepped up production.

Some economists said the figures indicate China?s recovery is well under way. Tao Wang, head of China research for UBS Securities, predicted that China's exports will rebound to the level of 2008 before China took a big hit from the global financial crisis.

She and others suggested the robust growth could increase pressure on China to lets its currency, the renminbi, appreciate against the US dollar.

The US and other Western governments contend the peg to the dollar keeps China?s exports artificially cheap and depresses competing economies.

China?s Premier Wen Jiabao said last week that exchange rates would remain basically stable for now.

China?s Commerce Minister, Chen Deming, said in late December the outlook for international trade remained ?extremely complicated? and predicted it could take two or three years for China?s exports to recover to pre-crisis levels. A Commerce Ministry spokesman repeated that prediction late last month.

But some analysts saw a hint of a possible shift in currency policy in comments Saturday by China?s central bank governor, Zhou Xiaochuan. He called pegging the renminbi to the dollar a ?special foreign exchange mechanism that will be abandoned sooner or later.?

February?s figures are harder to interpret than other months because of China?s holiday break that occurs early every year but not on the same date. Moreover, the comparison with the previous year could be somewhat misleading because February 2009 was a particularly bleak month for China?s exports and imports.

Nonetheless, Moody?s Economist.com, an economic research organization, said the data ireflects the dramatic improvement in the trade sector over a year ago. Other economists said the figures suggest the outlook of China?s Commerce Ministry is too pessimistic.

The 46 percent increase in exports beat economists? predictions and January?s increase of 21 percent.

Sourced = The Cambodia Daily