China’s exports and imports grew at their slowest pace in more than two years in December as foreign and domestic demand declined.
The biggest surprise was import growth which was much weaker than forecast.
The figures are indicators of a slowdown in the world’s second-largest economy which has raised economists expectations of more action by the Beijing government to support growth.
Financial markets took the data in their stride, with hopes that it will prompt a relaxation of monetary policy offsetting fears over slowing growth.
Despite easing growth rates, the total value of China’s imports and exports finished 2011 at an all-time high of $3.6 trillion. But the overall trade surplus shrank to a three-year low of $155 billion from 2010’s $183.1 billion.
The narrowing trade surplus for the year may help China argue that it is reforming its currency policy, countering foreign critics who accuse it of holding the yuan artificially low to give its exporters an unfair competitive edge.
But the pace of slackening trade is disconcerting for Beijing as exporters are mainstay employers in China.