Trade Data: Is China Losing Its Steam?

Furthermore, a look at the commodity imports volume also revealed a more upbeat picture. FT.com reported that based on preliminary customs data, China’s copper imports were 413,964 tonnes, an increase of 13.6% from January 2011. Crude oil imports also rose to 23.4m tonnes, equivalent to 5.5m barrels a day, compared to an average of 5.1m barrels a day last year.  In the next couple of years, many expect China may well overtake the U.S. as the world’s biggest importer of oil.

Despite the mixed bag of data points and opinions, one thing we could say for certain is that the era of consecutive annual double-digit Chinese GDP growth  has most likely come and gone.

China is starting to shift from the construction infrastructure growth stimulus model like the one implemented in post-2008 financial crisis, to soft infrastructure—welfare, education, and alternative energy, etc.—to encourage domestic consumption, which is much harder to execute and much slower to see the results showing in the GDP.

Furthermore, China is in the year of leadership transition which means less drastic and slow policy change by the incumbents as well as the new leaders, which would also translate into slower growth, at least in 2012 and into the first half of next year.  Meanwhile, the new leadership lineup, with a diverse and prestigious educational and professional background, is quite positive for China’s future.

For now, the IMF expects the growth of China to still stay above 8% in 2012-13 under its base scenario, noting that “China has room for a countervailing fiscal response, and should use that space.”