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Category: Ningbo Business
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Published: Thursday, 11 April 2013 08:22
A container area at Ningbo port, Zhejiang province. China saw a forecast-busting 14.1 per cent year on year surge in imports which eclipsed export growth of 10 per cent, signalling that domestic demand was gathering the steam needed to drive economic recovery. Photograph: Reuters
Brent crude futures have steadied around $106 per barrel after China's total imports surged in March, suggesting that recovery in the world's number two oil consumer is gathering momentum.
Chinese imports grew 14.1 per cent in March, while exports climbed 10 per cent, relieving concerns over the subdued import growth of previous months. Crude imports slipped 2.1 per cent from a year ago, in line with market expectations.
"The trade numbers bode well for the global economy; the drop in crude imports doesn't really change the overall picture," said Tony Nunan, an oil risk manager at Mitsubishi Corp in Tokyo.
"The oil markets are struggling and looking for support, and this should keep them supported for now."
Geopolitical concerns also bolstered oil prices, especially simmering tensions in Iran and North Korea.
Front month Brent futures had slipped 20 cents to $106.03 per barrel by 6.55am Irish time, after posting their biggest gain since December in the previous session, helped by a weak dollar and tame Chinese inflation data.
US crude fell 43 cents to $93.87 per barrel after inventory data showed crude increased by a larger-than-expected 5.1 million barrels, compared with analyst expectations for a 1.5 million-barrel rise.
Economic signals
Some analysts said the accelerating restocking process in some industries and a favourable base effect from a year ago may have flattered China's March imports, which otherwise remain constrained by falling global commodity prices and a slower-than-expected upturn in investment demand.
Export growth in coming months may not be able to match the pace of January and February, even if the recovering global economy continues to bolster demand for goods from Chinese factories, they added.
The annual dip in crude imports didn't surprise the market as some state-run refineries started planned overhauls, and crude runs at independent refineries also declined on poor margins.
Chinese refineries processed close to 10 million bpd in the first two months of the year, a level just a touch off the record rate of 10.15 million bpd in December, as newly started refining facilities ran at high rates.
"We expect China's oil demand to go through a soft patch during this turnaround, before picking up again in the latter part of Q2," Sijin Cheng, an analyst at Barclays Capital, said in a report after the trade data was released.
The data mitigates some of the weak sentiment that has been plaguing markets since the US Labor Department said on Friday that employers added 88,000 jobs outside farming, less than half the analyst forecast of a 200,000 increase.
"Oil futures are under some downward pressure and some of the recent economic data, such as U.S. jobs, is indicating that the U.S. economic recovery is still slow," said Victor Shum, a senior partner at Purvin & Gertz in Singapore.
"Traders will continue to look for signals out of China to see if the growth momentum is intact."
One such signal came from China's inflation numbers yesterday, which showed a slower rate of price increase, allaying concerns of policy tightening that could derail growth in the short term.
Diplomatic worries over North Korea and Iran helped keep prices firm.
Tension in the Korean peninsula escalated after North Korea moved one long-range missile in readiness for a possible launch and South Korea said it had raised its surveillance.
Iran, which is engaged in a dispute with Western nations over its nuclear program, said it had begun operations at two uranium mines and a milling plant after weekend talks to resolve the dispute ended in stalemate.
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Category: Ningbo Business
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Published: Thursday, 11 April 2013 08:21
A worker walks past shipping containers piled at a port in Ningbo in east China's Zhejiang province, Tuesday, April 9, 2013. China reported higher import growth in March on Wednesday, April 10, 2013 in a possible positive sign for its economic recovery but analysts said doubts about the accuracy of Beijing's data made it hard to draw conclusions. (AP Photo) CHINA OUT
BEIJING - China reported stronger trade in March in a possible positive sign for its recovery but analysts said the data might be inflated and give a distorted picture of the economy's health. Imports rose 14.1 percent after growing 5 percent rate for the combined January-February period, customs data showed Wednesday, suggesting Chinese manufacturers and consumers might be buying more. Export growth slowed to 10 percent from the previous two-month period's 23.6 percent. That could add to challenges for newly installed Communist Party leaders as they try to sustain the rebound from China's deepest downturn since the 2008 global crisis and avoid job losses. Analysts said, though, the data might be distorted by companies misreporting trade or government manipulation, clouding the picture of whether an economic recovery is gaining traction. Exports probably are lower than reported, based on what is known about shipments into Hong Kong, which Beijing lists as its biggest trading partner, said Francis Lun, chief economist of GE Oriental Financial Group. Hong Kong is Chinese territory but is treated as a separate customs region. "The figures in Hong Kong to and from China do not add up," he said. "Instead of 10 percent growth, you have 2 or 3 percent." China's economic growth rose to 7.9 percent in the three months ending in December, up from the previous quarter's 7.4 percent. Analysts say the recovery from the country's deepest downturn since the 2008 global crisis is being propped up by government spending and could be vulnerable if trade or state-driven investment weakens. Commentators raised questions after China's strong trade data failed to match up with much lower figures reported by its trading partners. Some suggested companies might be reporting phony exports to get tax rebates or to evade Beijing's strict capital controls and move money into China with fictitious billing of foreign customers. Others say Beijing might have exaggerated trade volume to make the economy look healthier during the transition to new Communist Party leaders in recent months. "Today's trade data release has not instilled any more confidence in either the quality of data or the strength of the recovery," said IHS Global Insight analyst Alistair Thornton in a report. Other indicators show economic activity recovering but at a slow pace. A survey of manufacturing by a Chinese industry group showed activity improved in March but by only a fraction of one point on a 100-point scale. Also in March, inflation fell, suggesting consumer demand might be weaker than authorities hoped. Referring to February's explosive reported export growth, Alaistair Chan of Moody's Analytics said in a report, "It now seems that it was probably due to some issue with the reporting of exports, or possibly over-invoicing as firms evaded capital controls to bring in more foreign capital." Chinese customs officials defended their data Wednesday at a news conference. "Every dollar that is listed in the customs trade data can be traced back to an actual declaration form," said Zheng Yuesheng, a spokesman for the bureau. "The exported or imported goods listed on the declaration form have to be something shipped across the border, either in or out." Beijing's capital controls and tax breaks and other privileges for foreign investors give Chinese companies an incentive to covertly bring in money from abroad. Economists believe a large share of China's reported foreign investment is money sent abroad by Chinese companies and "round-tripped" back into the country. China's trade is volatile in the first few months of each year as companies shut down for several weeks during the Lunar New Year and then buy raw materials to resume production. March exports rose to $182.2 billion while imports were $183.1 billion, leaving a rare monthly deficit of $900 million, according to the General Administration of Customs. The trade surplus with the United States narrowed by 34 percent from a year earlier to $11 billion. The surplus with the 27-nation European Union shrank 35 percent to $5.3 billion. Exports to Germany, China's biggest European trading partner, fell 7 percent while shipments to France declined 6.7 percent. Analysts have warned Beijing also faces possible risks from a rapid rise in bank lending and local government debt, part of which paid for the stimulus that helped China rebound quickly from the 2008 crisis. The ratings agency Fitch cut its rating on China's long-term local currency sovereign debt late Tuesday, citing potential risks from rapid growth in credit and local government debt loads. The rating was cut from AA- to a still healthy A+. The change is unlikely to cause trouble for the government because it has relatively low debt levels compared with other major economies. Fitch left its rating on China's foreign-currency government debt unchanged. Fitch said its analysts believe China's total credit may have risen to the equivalent of 198 percent of gross domestic product by the end of 2012 from 125 percent in 2008. It said that includes bank credit and informal lending used by entrepreneurs who often cannot get loans from the state-owned financial industry. Debt of local governments rose to 25.1 percent of GDP at the end of 2012 from 23.4 percent a year earlier, Fitch said. "Risks over China's financial stability have grown," said a Fitch statement. It warned that "underlying structural weaknesses" including relatively low economic development despite rapid growth "weigh on China's ratings." AP Business Writer Pamela Sampson in Bangkok and researcher Flora Ji in Beijing contributed. General Administration of Customs of China: http://www.customs.gov.cn http://www.philly.com/philly/wires/ap/news/nation_world/20130410_ap_chinarecoverydoggedbydoubtasdataquestioned.html#ixzz2Q6qpWyrR