China missed its target for trade with the rest of the world for the third year in a row in 2014, a bad augury for when the country unveils its gross domestic product data next week.
The National Bureau of Statistics said total trade with the rest of the world rose only 3.4% in 2014, less than half the 7.5% rate that the government had targeted, underlining a slowdown in its domestic economy in recent months, as the country struggles to shift its focus away from export-oriented manufacturing industries.
Analysts expect China to report next week that growth slowed to a little over 7% last year, its slowest in 24 years, and less than the 7.5% that Beijing had targeted.
The problems look likely to extend well into the current year. President Xi Jinping has already guided expectations for growth lower, saying that 7% “wouldn’t be a disaster.”
Reuters quoted a spokesman for China’s customs bureau as saying that: “The negative factors that crimped trade performance in 2014 will be sustained for some time.”
Tuesday’s figures are a little deceptive, in that the headline numbers for December’s imports (down 2.4% year-on-year) were depressed by the sharp fall in prices for commodities that China needs to import, such as oil and iron ore.
In volume terms, China actually imported more oil than ever before in December, an average of 7.15 million barrels a day, as it took advantage of low prices on world markets to restock reserves. Imports of iron ore, the main ingredient in steelmaking, also hit a record high in volume terms.
But commodity markets suggested that they didn’t think December’s figures represented anything more than a blip in a generally slowing trend. Copper prices fell 3% to a new six-year low of $2.64/lb, while oil prices, almost inevitably, slid further to $44.81 a barrel, the lowest since February 2009.
China’s stock market in any case paid more attention to the healthier export numbers in December, which were up 9.7% on the year. With China being the world’s largest exporter, its figures are a proxy for the strength of demand from the global economy. The strong performance in December went some way to allaying fears about global growth, pushing stocks higher in both Shanghai and Hong Kong.