China’s import growth fell to a two- year low in December, underscoring a slowdown in the fastest- growing major economy that deepens risks for the global outlook.
Imports (CNFRIMPY) rose 11.8 percent from a year before, less than all 21 estimates in a Bloomberg News survey of economists, a government report showed today in Beijing. The moderation caused the trade surplus to increase to $16.5 billion in the month, as exports advanced 13.4 percent in December.
Signs of domestic demand moderation bolstered forecasts for monetary easing -- spurring a gain in local stocks -- as Europe veers toward a recession and the International Monetary Fund prepares a “substantial” cut to its global growth forecast. The widening surplus may give U.S. Treasury Secretary Timothy F. Geithner ammunition to renew pressure for a stronger yuan on a visit to Beijing today.
“China will be asked to step up and shoulder more responsibility, together with the U.S., to ensure the world does not fall into a recession again,” said Liu Li-Gang, an economist in Hong Kong at Australia & New Zealand Banking Group Ltd. who previously worked at the World Bank. “If the yuan were to depreciate this year, China’s exchange-rate policy will be accused of a ‘beggar thy neighbor policy.’”
The Shanghai Composite Index (SHCOMP) of stocks climbed 2.2 percent as of 1:44 p.m. local time, rising on speculation the central bank may add to last month’s cut in banks’ reserve requirement ratio. Qu Hongbin, HSBC Holdings Plc’s chief China economist, today predicted three reductions in the next six months.
