Chinese Exports Fall for First Time in Seven Years

Beijing, China, Dec. 10, 2008--China’s exports in November fell for the first time in seven years as recessions in the U.S., Europe and Japan are reducing purchases of Chinese products.

Exports declined 2.2 percent in November from a year earlier, the customs bureau said in a statement on its Website. Imports fell 17.9 percent, pushing the trade surplus to a record $40.09 billion.

The trade collapse intensifies pressure on China’s leaders to cut interest rates, extend a 4 trillion yuan ($581 billion) spending plan and let the yuan depreciate. China’s exports quadrupled after the country joined the World Trade Organization in 2001, helping to make it the fastest-expanding major economy and the biggest contributor to global growth.

“The figures are horrifying,” said Lu Zhengwei, chief economist at Industrial Bank Co. in Shanghai. “Plunging imports show that on top of faltering global demand, domestic demand is also shrinking as the economy cools.”

In October, exports rose 19.2 percent and imports climbed 15.6 percent. None of 18 economists surveyed on exports and 17 economists polled on imports predicted a decline in November.

“These are absolutely dreadful numbers,” said Mark Williams, an economist with Capital Economics Ltd. in London. “It will stoke speculation that the government will force a depreciation of the yuan. Further cuts in interest rates are pretty much inevitable.”

The value of exports was $115 billion, the lowest in eight months and down from a peak of $136.6 billion in July.

China’s economy grew 9 percent in the third quarter, the weakest pace in five years. Producer-price inflation was the slowest in two years last month and foreign direct investment fell 36.5 percent from a year earlier, the government said in separate statements today.