China trade suffers on global fears Chinese exports slowed sharply in November in a reminder of the external headwinds that are blowing against the country's economic recovery. Exports increased 2.9 per cent year on year, down from an 11.6 per cent pace in October and well short of forecasts for another similarly strong performance. Imports were unchanged from a year earlier, slowing from a 2.4 per cent increase in October, though a pick-up in the volume of key commodity imports was consistent with more positive domestic investment and consumption data. IN Chinese Economy Smaller inflows through trade channels will act as a drag on the Chinese recovery, which has been driven primarily by a boost in government spending on infrastructure projects in recent months. Ma Xiaoping, an economist with HSBC, said the weak export reading would encourage the Chinese government to continue its fiscal and monetary support for the economy. "Lacklustre exports pose the biggest downside risk to China's ongoing recovery," she said. As such, we expect Beijing to maintain its accommodative policy stance in the coming quarters. Chinese exports to developed economies weakened across the board in November. Exports to the US fell nearly 3 per cent year on year after rising 9 per cent in October, while shipments to Europe declined 18 per cent from a fall of 8 per cent a month earlier. The lack of growth in imports was explained in part by the fall in global commodity prices. Imports of both iron ore and crude - two commodities closely correlated to the Chinese economy - both increased in volume terms. While the export outlook will continue to remain shaky in the coming months, a sustained recovery of the Chinese economy is expected to filter through into stronger imports. "With [a] rising need for restocking, robust final [investment] demand and rebounding raw material prices, we expect import growth to quicken in coming months," said Lu Ting, an economist with Bank of America Merrill Lynch.