China's foreign trade tumbles to 10.8% in Jan

Exports dropped 3.2% to 1.23 trn yuan and imports slumped 19.7% to 860 bn yuan

China's foreign trade tumbled 10.8 per cent to $341.16 billion in January, starting the new year on a shaky note amid a slump of its exports and imports putting more pressure on the slowing second largest economy of the world.

The overall trade dropped to 2.09 trillion yuan ($341.16 billion) year on year in January, China General Administration of Customs (GAC) said today.

Exports dropped 3.2 per cent to 1.23 trillion yuan and imports slumped 19.7 per cent to 860 billion yuan, making the trade surplus expand 87.5 per cent to 366.9 billion yuan, GAC data said, attributing the decline to the Chinese Lunar year and Spring Festival during which entire China grinds to halt for over a fortnight.

"Spring Festival impacts foreign trade data at the beginning of every year," state-run Xinhua news agency quoted GAC as saying.

The State Council, China's Cabinet, has approved the GAC to release its trade data in yuan-denominated version since this year.

Before 2014, the GAC mainly used the US dollar in its trade data releases. It started to use both the dollar and yuan to denominate all trade figures in 2014 in an effort to promote the expansion in use of yuan.

The trade decline continued as China's annual growth dropped down to a 24 year low of 7.4 per cent last year.

Fiscal revenue growth dropped to 8.6 per cent, a 23 year low, while the expenditure rose 8.2 per cent.

According to official data, the fiscal revenue stood at 14.04 trillion yuan ($2.3 trillion) compared to $2.11 trillion in 2013.

China's economy grew 7.4 per cent last year -- its weakest expansion in 24 years - due to slowing domestic demand and a fragile global market.

The fiscal revenue was hurt by weak factory output, consumption, investment and corporate profits, officials said.

Besides posting its lowest growth since 1990, during which China grew to be second largest economy, Chinese economy also missed the official target of 7.5 per cent in 2014 for the first time in recent years rising concerns about a prolonged slowdown.

An IMF forecast said China's growth rate would fall below 7 this year as it was expected to further decline to 6.8 this year and 6.3 next year.

China is expected saddle with slower growth in fiscal revenue and rising fiscal expenditure, due to a weakening economy, the country's urbanisation drive and industrial structure adjustments that need funding, said Gao Peiyong, a fiscal expert with the Chinese Academy of Social Sciences said recently.

Finance Minister Lou Jiwei recently that fiscal revenue will grow at a medium-to-low speed in the years to come.

Despite slower growth in fiscal revenue, China pledged to stick to a proactive fiscal policy in 2015 while making it more forceful, which means the government will do its best to reduce tax burdens on companies and continue to improve people's lives.