China exports fall by most in 13 years, imports drop by record

China's exports fell by the most in almost 13 years as demand dried up in the U.S. and Europe and imports plunged by a record, signaling a deepening slump in the world's third-biggest economy.

Outbound shipments declined 17.5pc in January from a year earlier and imports fell 43.1pc, the customs bureau said on its website today. Both numbers were worse than economists' forecasts.

The $39.11bn trade surplus, the nation's second biggest on record, may add to tensions as global leaders seek to avoid a trade war amid the worst financial crisis since World War II. China's economic slowdown has already cost the jobs of 20 million migrant workers and growth may slide to 6.1 percent this quarter, the least since 1999, estimates show.

"It's a very eye-catching trade surplus and people will ask how it can be so high at a time that everybody else's economy is suffering," said Dariusz Kowalczyk, chief investment strategist at SJS Markets Ltd in Hong Kong. "What's happening here is really dramatic, underscoring plunging global demand."

Falling commodity prices drove down import costs as China's demand for raw materials also faltered because of the export slowdown and a property slump. The value of crude-oil imports fell 57pc from a year earlier.

Exports to the European Union fell 17.4pc. Those to the U.S. slid 9.8pc. Shipments of electronics dropped 21pc. Steel slid 32.5pc and toys declined 14.7pc.

Government researchers have advocated weakening the yuan against the dollar to support exports. China should "actively guide" the yuan to about 6.93 against the dollar to aid growth and bolster employment, according to a report by the Ministry of Finance's research institute published Feb. 7.