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China economic dragon losing puff

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China’s stuttering economy has suffered another blow with export growth slowing sharply in November and imports surprisingly contracting, resulting in a record monthly surplus. 

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Exports from the world’s second-largest economy expanded 4.7 per cent year-on-year to $US211.66 billion ($A229.01 billion), while imports dropped 6.7 per cent to $US157.19 billion.

The General Administration of Customs said the surplus soared 61.4 per cent to a record $US54.47 billion, beating August’s previous record of $US49.8 billion.

Median forecasts had been for exports to increase 8.0 per cent and imports to rise 3.9 per cent, according to a survey of 16 economists by Dow Jones Newswires.

The latest figures come with China assailed by industrial weakness, falling property prices and high corporate and local government debt burdens.

The combination of factors last month prompted the central bank to cut benchmark interest rates for the first time in more than two years.

China’s gross domestic product grew an annual 7.3 per cent in the third quarter, the slowest since the height of the global financial crisis in early 2009.

The sharp slowdown in export growth means there’s a risk China’s growth this year will come in below 7.5 per cent “as both domestic and external demand weakened”, ANZ economists Liu Li-Gang and Zhou Hao said in a report reacting to the data on Monday.

On imports, they added, “the large decline was way out of our expectation”.

China’s official GDP growth target for 2014 is “about 7.5 per cent”, though officials including Premier Li Keqiang have said the figure could come in lower.

Clues as to next year’s target from the annual Central Economic Work Conference expected this week will be closely watched, although its conclusions will probably not be formally unveiled until March.

Economists increasingly expect authorities to lower the target to about seven per cent owing to the downward pressures as well as authorities’ commitment to transform China’s economic growth model to one driven by consumers rather than state-led investment.

China last lowered the target in 2012 to 7.5 per cent from 8.0 per cent and a drop to 7.0 per cent would be the lowest since 2004.

In November, export growth slowed from 11.6 per cent year-on-year expansion in October, when imports grew 4.6 per cent. The trade surplus had been forecast at $US45.1 billion.

The Shanghai Composite Index jumped 1.42 per cent, or 41.66 points, to 2,979.31 by midday on Monday following the release of the trade figures, with traders hoping for fresh economy-boosting measures.

In the first 11 months of the year, total trade with the European Union increased 8.9 per cent to 3.43 trillion yuan ($US556 billion), while that with the United States gained 5.2 per cent to 3.09 trillion yuan, Customs said.

Trade with the ASEAN group of Southeast Asian countries was up 7.1 per cent at 2.66 trillion yuan but with Japan, the world’s third-biggest economy, trade edged down 0.7 per cent to 1.75 trillion yuan.