China 2011 trade surplus shrinks as demand weakens

The figures add to mounting evidence the economy is slowing and will ratchet up pressure on Beijing to further loosen policies to prevent the world’s second-largest economy from suffering a painful hard landing.
The 2011 trade surplus – flagged by Commerce Minister Chen Deming last week – narrowed to US$155,14 billion from US$181,51 billion in 2010, the customs agency said in a statement, reflecting the turmoil in Europe and the United States.
Exports rose 20,3 percent to US$1,899 trillion in 2011, compared with an increase of 31,3 percent in the previous year, while imports climbed 24,9 percent to US$1,743 trillion, much slower than the 38,8 percent growth in 2010. Analysts expected export growth to halve this year from 2011 as European woes and a sluggish US economy drag Chinese economic expansion below 9 percent for the first time in more than a decade. Weakening demand for exports will “provide further drag on the Chinese economy at least through the first half of the year,” said IHS Global Insight analysts Alistair Thornton and Ren Xianfang.
Moody’s economist Alaistair Chan said the slowdown in imports would push policymakers to cut the reserve requirement ratio – the portion of deposits banks must set aside – in the first half to spur lending. – AFP.