China petchems imports seen up as it becomes top exporter

11 January 2010 08:15  [Source: ICIS news]

By Fanny Zhang and Judith Wang

GUANGZHOU (ICIS news)--China, which surpassed Germany as the world’s largest exporter in 2009, will see continued high demand in its crude and chemical raw material imports in 2010 to meet growing domestic and foreign consumption, analysts said on Monday.

China’s exports increased by 17.7% year on year to $130.7bn in December 2009, the fourth highest in terms of value on record, while imports rose by a steep 55.9% to $112.3bn, based on data released by China’s General Administration of Customs (GAC) on Sunday.

The country's foreign trade decreased 13.9% year-on-year to $2,207bn in 2009, with exports down 16% to $1,202bn and imports down 11.2% to $1,001bn, based on GAC’s data.

Crude imports hit an all-time high of 21m tonnes in December and total crude imports in 2009 was 179m tonnes, 13.9% higher than 2008, the GAC data showed.

Imports of ABS resins rose 11% to 1.95m tonnes, while imports of polyesters and rubber reached 228,167 tonnes and 3.18m tonnes respectively, up by 9.4% and 10.4% respectively.

“The high crude imports represent strong demand of energy, which is in line with the economic picture,” said Wang Hu, a macro-economy analyst at Shanghai-based brokerage house Guotai Junan Securities (GTJA).

The country’s crude and chemical imports were expected to remain high to support the growing needs of the industry, analysts said but declined to give any estimates.

China was expected to post double-digit growth in foreign trade this year as the global economy showed signs of recovery, they said. 

“We are positive for the exports in the first quarter of 2010 in line with the recovery of global economy. The yearly growth of imports and exports will likely exceed our forecast numbers of 20-25% and 10-15% [respectively] in 2010,” said Dong Xian’an, a chief economist from Shanghai-based brokerage house Industrial Securities.

“In 2010, the foreign trade will become the shining star to drive China’s GDP expansion and it will also be the important engine to lead China’s economic growth in the next five years,” said Zhou Binglin and Wang Yi, macro-economists from Shenzhen-based Guosen Securities.

“The big imports in December should be mainly attributed to government’s stimulus plan on expanding domestic demand. This year, recoveries of overseas demand would lift Chinese exports and the country would no longer need massive stimulus policies to secure GDP,” said Wang at GTJA.

Future growth may however be hindered as other countries could impose more trade barriers, other analysts said.

“Historical data in the last 50 years showed that some 9-10% share in world trade pie is a peak and China has already reached that. So, there will be limited room to see further increase. More trade disputes will arise and trade partners will try to give you barriers if you lead too much and break the balance,” Wang said.

Although total foreign trade decreased last year, an upward trend was seen since August, on strong domestic demand, the GAC said.

“Impacted by the global financial crisis, China’s foreign trade declined continuously since November 2008. However, situations stabilized in March 2009 and pickups were seen in August and extended until the year end”, the GAC said.

“Foreign trade actually rose 2.8% on volume term, meaning that there’s still increase if price is not counted”, said Wang.