China trade data well below expectations

China's imports fell surprisingly in November, showing weak domestic demand

Trade data from the world's second largest economy, China, came in well below expectations on Monday, heightening fears of a sharper slowdown.

China's exports rose 4.7% in November from a year ago, compared to market forecasts of a 8.2% jump.

Imports fell 6.7% in the same period against predictions of a 3.9% rise.

The surprise slump in imports led the trade surplus to hit a record $54.5bn (£35bn), the highest in 14 years.

While the trade surplus, which is up 61% compared to last year, will add to economic growth in the fourth quarter, it does suggest the government needs to step in to stimulate growth, said Dariusz Kowalczyk, economist at Credit Agricole.

"[Imports fall] is partly a reflection of lower commodity prices and base effects, but these two factors cannot fully explain the weak import number and we have to assume that poor domestic demand has played a part," he said.

"We expect a reserve requirement ratio cut in December, introduction of reverse repos this week, and another rate cut in the first quarter."

In October, exports grew by 11.6%, while imports were higher at 4.6%.

China's economic growth had slowed to 7.3% in the third quarter, marking its weakest quarter since the global financial crisis as a cooling property market and tighter credit conditions weighed on growth.

Economists had been calling for stimulus measures from the government and the central bank did unexpectedly cut interest rates for the first time in over two years last month to spur activity.