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Viewing cable 09BEIJING1297, CHINA'S EXPORT DECLINE STABILIZING IN

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Reference ID Created Released Classification Origin
09BEIJING1297 2009-05-14 10:38 2011-08-23 00:00 UNCLASSIFIED//FOR OFFICIAL USE ONLY Embassy Beijing
VZCZCXRO4180
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #1297/01 1341038
ZNR UUUUU ZZH
O 141038Z MAY 09
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3980
INFO RUEHOO/CHINA POSTS COLLECTIVE IMMEDIATE
RUEHKO/AMEMBASSY TOKYO IMMEDIATE 2581
RUEHBS/USEU BRUSSELS IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE
RUEATRS/DEPT OF TREASURY WASHINGTON DC IMMEDIATE
RUCPDOC/USDOC WASHDC IMMEDIATE
UNCLAS SECTION 01 OF 02 BEIJING 001297 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EAP/CM SHAWN FLATT, EEB/TPP ERIK 
MAGDANZ, EEB/TPP ELIZA KOCH, E HUGO YON 
STATE PASS USTR FOR TIM STRATFORD, AUDREY WINTER, 
ANN MAIN, ERIC ALTBACH 
DOC FOR IRA KASOFF/NICOLLE MELCHER (5130) FCS (3132) 
TREASURY FOR OASIA/ROBERT DOHNER 
NSC FOR JIM LOI 
 
E.O. 12958:  N/A 
TAGS: ETRD ECON EIND EMIN CH
SUBJECT:  CHINA'S EXPORT DECLINE STABILIZING IN 
APRIL, IMPORTS UP, SURPLUS LOWER 
 
1. (SBU) SUMMARY.  China's General Administration of 
Customs May 12 reported a 22.8 percent drop in 
China's overall foreign trade to $170.7 billion 
versus the prior year, the sixth straight monthly 
decline in China's overseas trade flows.  While on a 
year-on-year basis exports dropped by 22.6 percent 
to $91.9 billion and imports fell 23.0 percent to 
$78.8 billion, exports were almost flat from the 
previous month, and imports increased around 7 
percent over March.  After a surge in the trade 
surplus in March, China's global trade surplus in 
April dipped to $13.1 billion, partly due to rising 
raw material imports.  The export decline is slowing, 
while the rise in imports seems due more to raw 
materials purchases than consumer demand.  End 
Summary. 
 
MOFCOM's Chen Deming Spins the Stats 
 
2. (SBU)  During his visit to Washington April 27, 
Minister of Commerce Chen Deming offered a positive 
preview of April's trade data: "I have some good 
news," he said, "in the first 20 days of April, we 
have witnessed a slowdown in the decline of our 
foreign trade."  In absolute terms and on a month- 
to-month basis, his assessment 
was correct: April's export levels ofQ91.9 billion 
slightly bested March exports of $90.3 billion, and 
AprilQmports of $78.8 billion also exceeded March 
imports of $71.1 billion.  China Customs emphasized 
this monthly increase by, for the first time, 
releasing month-on-month unadjusted trade figures. 
 
China's Export Decline Slows 
 
3. (SBU)  While the unadjusted figures overstate the 
improvement in China's exports, most analysts agree 
that the decline in exports appears to have 
stabilized.  Adjusted for China's first quarter 
seasonal effects -- including effects of the Chinese 
New Year holiday and the usual post-Christmas dip in 
exportQ-- Helen Qiao at Goldman Sachs Group 
estimates that exports fell about 1.3 percent over 
March, with JP Morgan's Qian Li Wang estimating the 
fall at 2.8 percent.  While this is certainly a 
decline, the speed of the drop appears to have 
modulated. 
 
4. (SBU)  That said, many observers still found 
April's export figures disappointing.  The important 
category of mechanical and electrical exports was 
down slightly, and after posting impressive monthly 
gains in April low-end consumer goods exports 
contracted almost 10 percent over March.  Steel also 
performed poorly, down over 22 percent month on 
month, adjusted.  High-tech exports were the only 
bright spot. 
 
5. (SBU)  By destination, exports to ASEAN, Taiwan, 
Korea, and the United States showed stability.  On 
the other hand, exports to the Euro area and Japan 
remain weak. 
 
China's Imports Stronger 
 
6. (SBU)  On a seasonally adjusted basis, Qiao and 
Wang estimate that imports grew roughly 6 - 7 
percent 
over March.  In part this reflected a stabilization 
in international commodity prices, as well as 
initial signs of recovering Chinese demand. 
 
7. (SBU)  By source country, imports from Korea, 
Taiwan, and ASEAN recovered ground, although these 
imports had also fallen the most in the previous 
months.  Imports from the EU were up slightly on a 
month-on-month basis, and appear to have taken 
 
BEIJING 00001297  002 OF 002 
 
 
market share from the United States.  Adjusted U.S. 
imports appear to have improved slightly over March, 
but at a much slower rate than China's other trading 
partners. 
 
COMMENT: Year-on-Year versus Month-on-Month 
 
8. (SBU)  Overall, the Chinese year-on-year trade 
data gives credence to anecdotal reports of "new 
mountain ranges" of 200,000 empty ocean containers 
building in Shanghai and other ports elsewhere in 
China.  Reviewing January - April 2009 as a whole, 
China's General Administration of Customs reported 
China's exports were down by 20.5 percent year-on- 
year in the first four months to $337.42 billion and 
imports were off by 28.7 percent to $261.99 billion. 
Likewise, hopes by China's trading partners for a 
major rise in consumer demand-driven imports 
resulting from domestic stimulus spending have not 
yet been borne out, although the much-discussed 
"green shoots" may be evident. 
 
PICCUTA