China’s Trade Surplus Rose To $31.6 Billion In December: Official Data

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By Bhaskar Prasad | January 10, 2013 2:17 PM EST

China’s trade surplus gained in December over the previous month in an indication that the world’s second-largest economy is reviving its growth momentum.

According to the data released Thursday by the National Bureau of Statistics, China’s trade surplus rose to $31.6 billion in December, against $19.6 billion in November and far above analysts’ expectation of $19.7 billion. China’s exports rose 14.1 percent in December up from 2.9 percent increase in November.

This report comes after it was reported last week that China's manufacturing activity expanded in December for the third month in a row.  The data released Tuesday by the China Federation of Logistics & Purchasing showed that the Purchasing Managers' Index remained unchanged at 50.6 in December from the previous month. Significantly, the index remained in the expansion zone, a reading above 50. The expansion of the manufacturing activity should allay the fears of a sharp retardation of the Chinese economy.

Moreover, China’s industrial production rose in November from October, indicating an upswing in the manufacturing output. National Bureau of Statistics data showed that industrial production, which measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities, rose 10.1 percent in November, up from 9.6 percent in October and also more than the analysts’ expectation of 9.8 percent.

But analysts are not fully optimistic about the revival of China’s growth as global economic conditions continue to be weak amid the debt crisis in the euro zone. Gross domestic product growth slowed to 7.4 percent in the third quarter, from 7.6 percent in the second quarter, due to soft global demand and reduced domestic real estate investment.

Meanwhile, it was reported last month that the rate of inflation in China accelerated in November from the same period last year. The National Bureau of Statistics said the consumer price index rose 2 percent in November from a year earlier, up from 1.7 percent in October.

Market participants hope Chinese policymakers will soon announce monetary easing measures so that the economy will continue to see rising industrial activity.

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