CHINA’S January trade performance was worse than expected as tepid demand persisted both at home and abroad, raising expectations of further government measures to arrest the slowdown and to quell market jitters.

    January exports fell 11.2 percent from a year earlier — the seventh straight month of decline, while imports tumbled 18.8 percent — the 15th month of decline, both far worse than expected, data released by the General Administration of Customs showed yesterday.

    Exports declined even though China has allowed the yuan to weaken nearly 6 percent against the U.S. dollar since last August, underlining the extent to which global demand has weakened.

    China posted a record trade surplus of US$63.3 billion in January, partly due to soft demand and falling commodities prices, versus US$60.09 billion in December.

    “Overall, we believe the sharp drop of trade in January was a reflection of weak external demand, especially given the weak exports of neighboring economies such as South Korea and Taiwan,” ANZ economists Liu Ligang and Louis Lam wrote in a research note.

    “The record level trade surplus indicates that China continued to run a large current account surplus, and this should help offset some of the capital outflow and alleviate some depreciation pressure on the Renminbi (yuan).”

    China will keep the yuan basically stable against a basket of currencies and it will not allow speculators to dominate market sentiment regarding China’s foreign exchange reserves, central bank governor Zhou Xiaochuan was quoted as saying Saturday.

    Premier Li Keqiang has said the government will not promote exports through currency depreciation, although some policy advisers have been calling for sharper yuan falls.

    “Today’s numbers hint that Chinese currency is still under pressure to weaken. That said, recent strength in onshore and offshore yuan is largely due to the central bank’s effort to dampen speculative positions,” said Zhou Hao, Commerzbank Asia senior economist in Singapore.

    China’s exports to the United States, the country’s biggest market, fell 9.9 percent in dollar terms in January from a year earlier, while exports to the European Union — the second biggest market, fell 12 percent, the customs data showed.

    The customs office said it expected downward pressure on China’s exports will ease, starting in the second quarter of this year.

    A source at the Commerce Ministry also said the government would not set an annual target for foreign trade this year.

    For 2015, China’s total trade tumbled 8 percent from 2014, well below the government’s target of 6 percent growth and the worst performance since the global financial crisis.

    China is expected to target GDP growth in a range of 6.5 percent to 7 percent this year, sources have said, setting a range for the first time because policymakers are uncertain on the economy’s prospects.(SD-Agencies)