China's exports and imports dip raising growth concerns
The manufacturing and export sectors are key drivers of growth in China China's exports fell in January, the first decline in more than two years, raising fresh concerns about the impact of a global slowdown on its economy.
Exports fell 0.5% from a year earlier amid sluggish global demand. Shipments were also hurt as factories were shut during the Lunar New Year.
Meanwhile, imports dipped 15.3% raising fears about slowing domestic demand.
China has been trying to boost domestic consumption in a bid to offset slowing exports and rebalance its economy.
'We believe the major drag and biggest risk to China's growth in 2012 is weaker external demand caused by the ongoing eurozone debt crisis'
Analysts said while the closure of establishments during the Chinese New Year affected the numbers, the decline could not be attributed to the festival alone.
They said that the bigger-than-expected drop, especially in imports, was worrying as it gave an indication of slowing growth.
"The collapse of imports begs particular attention," said Ren Xianfeng of IHS Global in Beijing.
"A fall of over 15% in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest."
Earlier this month, the China Federation of Logistics and Purchasing reported that the import index for January fell to 46.9 from 49.3 in the previous month, showing slowing demand at home.
Despite these numbers, analysts said the dip was likely to be short-lived and imports may start to rise in the coming months.
'Biggest risk'
The export sector has been key to China's economic growth in the past few years as global firms have turned to Beijing to take advantage of its low-cost manufacturing.
However, a slowdown in the US and the eurozone, which are two of the biggest markets for Chinese goods, has seen the pace of growth of shipments slow in recent months.
The debt crisis in the eurozone and high rate of unemployment in the US have hurt consumer confidence and dented demand for Chinese goods.
Official figures on Friday showed that bilateral trade between China and the European Union fell more than 7% in January.
Analysts said the ongoing debt issues in the eurozone were the biggest threat to China's growth.
"We believe the major drag and biggest risk to China's growth in 2012 is weaker external demand caused by the ongoing eurozone debt crisis," said Ting Lu of Bank of America Merrill Lynch in Hong Kong.
"Our European economists expect a moderate eurozone recession at -0.6% in 2012, while nobody knows the exact probability and severity of a collapse of the eurozone."
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Unexpected loss for India's Tata Steel
Tata Steel is the world's tenth largest steelmaker and the biggest in India Tata Steel, the largest producer in India, unexpectedly reported a loss for the last three months of 2011, hit by weak demand.
The company saw a net loss of 6.03bn rupees ($122m; £77m) in the third quarter, Tata Steel said in a statement.
That compares with a net profit of 10bn rupees a year earlier.
Higher prices for raw materials as well as falling demand and prices in Europe contributed to the decline, Tata said.
Analysts were expecting a 3.4bn rupee net profit, according to Reuters news agency.
The company operates two thirds of its capacity in Europe, where the debt crisis is hitting demand.
The head of Tata's European operations said he did not expect demand to pick up this year.
"We are accelerating cash conservation in expectation of muted but stable demand in our core markets in 2012," he said in a statement.
Analysts said Tata Steel was being squeezed from both sides.
"There hasn't been a demand uptick that was expected, so prices have come down," said Ravindra Deshpande from Elara Securities in Mumbai.
"At the same time, none of their production costs are lower, so margins are under pressure."
Mr Deshpande added that he did not expect much better results in the next few quarters.
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