China 2014 exports rise 6.1%, imports up 0.4%

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China’s exports rose 6.1 percent year on year in 2014, while imports increased 0.4 percent, customs data revealed on Tuesday.

Last year, the country’s total exports and imports value increased 3.4 percent year on year.

Subdued price levels point to more policy easing

China’s consumer inflation remained weak in December while price declines at the factory gate level continued to deepen, suggesting weakness in the world’s second-largest economy but will create space for policy makers to take easing measures.

Growth in the consumer price index (CPI), the main gauge of inflation, rebounded to 1.5 percent in December from November’s 1.4 percent, its slowest increase since November 2009, the National Bureau of Statistics (NBS) said Friday.

On a monthly basis, December’s CPI edged up 0.3 percent against the previous month, reversing the downward trend experienced since September.

This small pick-up in December’s consumer inflation was mostly driven by food prices, said Chang Jian, Barclays chief China economist.

Food prices, which account for about one-third of the CPI calculation’s weighting, rose 2.9 percent from a year ago in December, compared to 2.3 percent the previous month.

Growth in non-food prices, however, fell to a 56-month low of 0.8 percent, led by falling transportation and housing costs, Chang said.

China’s consumer prices grew 2 percent in 2014 from one year earlier, well below the government’s 3.5 percent target set for the year. It was also below the 2.6 percent growth registered in 2013.

Producer price index (PPI) slumped 3.3 percent in December from one year earlier, the sharpest fall in more than two years, and the decline deepened from November’s 2.7 percent fall.

Tumbling oil and other commodity prices have extended the run of producer-price declines to a record 34 months.

PPI fell 1.9 percent year on year in 2014.

The easing inflationary pressure will give the central bank more room to initiate measures to support growth.

In November, the central bank cut benchmark interest rates for the first time since the summer of 2012. Analysts are divided over whether more rate cuts would follow in the coming months as the 2014’s growth figures are likely to register its slowest pace in more than a decade.

Chang forecast two additional cuts in benchmark interest rates, by 25 basis points each time, in the first half of this year, as well as three cuts in the reserve requirement ratio (RRR), by 50 basis points each time, throughout the year.

Liu Liu, analyst of China International Capital Corp., expects the central bank to cut interest rates once and lower RRR four times this year likely in the first half.

However, Liu Ligang, chief Greater China economist at ANZ Banking Group., said the central bank appeared to be reluctant to cut RRR to counter falling prices and economic slowdown.

The Chinese government should use both structural reform measures and monetary policy tools to head off the risk of deflation, especially when domestic demand remains weak and commodity and energy prices continue to fall, Liu Ligang wrote in a report to clients.

Final figures for last year’s gross domestic product (GDP) are slated for released on Jan 20.

 

Source : China Daily | January 13, 2015

Thomas D’Innocenzi

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About thomasdinnocenzi

Thomas D'Innocenzi is a highly accomplished, results-focused senior international executive with extensive experience in global sourcing and market development worldwide to meet evolving business needs. Tom has proven ability in implementing and managing profitable global sourcing operations worldwide. Extensive experience in international market development operations to accommodate rapid growth. Skilled in building top-performing teams, benchmarking performance, and restricting organizations to improve efficiency, productivity, and profitability. Experienced transition leader and change agent. As principal of Nova Advisors, LLC I’ve assembled an exemplary team that brings with them the knowledge and experience gained from starting up a Global Sourcing program with multiple Fortune 500 companies as well as the largest supplier network throughout the Asia-Pacific region. We have experience and expertise in more than a thousand medical and pharmaceutical products in manufacturing and sourcing at the best value. The right product, the right price point and the right branding fueled these successes that resulted in double-digit growth for top line sales and bottom line net margins for our customers. What sets us apart: • Our reach includes a large network of suppliers & manufacturers spanning 13 countries in Asia-Pacific region • We understand the manufacturing process and the business of the supplier and the buyer • Our company culture is based on quality assurance and our process is based on local quality control Our commitment is to be your partner offering the best products and services at the lowest cost. Contact me to discuss how we can make the global marketplace work for you. thomas@novaadvisors.com In addition, I am open to discussing opportunities in global sourcing, international marketing & sales, logistics and medical/pharma in Thailand, Vietnam, Malaysia, Philippines & Japan. Aside from my work I enjoy piano, astronomy, physics, and assisting my daughters with their studies. SPECIALTIES: Global Sourcing, Supply Chain Management, Business Development, Marketing, Logistics, Global Networking, Market Development, Healthcare Solutions, Pharmaceuticals, Medical Devices, Technology, Asia, Southeast Asia, US and Canada
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