国际英语新闻:China Focus: China's foreign trade tumbles 10.8 pct in Jan.

BEIJING, Feb. 8 (Xinhua) -- China's foreign trade tumbled in January as major data experienced routine decline ahead of the upcoming Chinese lunar New Year, or Spring Festival.

The total trade volume stood at 2.09 trillion yuan (341.16 billion U.S. dollars) last month, down 10.8 percent year on year, the General Administration of Customs (GAC) said Sunday.

Exports dropped 3.2 percent to 1.23 trillion yuan and imports slumped 19.7 percent to 860 billion yuan, making the trade surplus expand 87.5 percent to 366.9 billion yuan, according to the GAC data.

"Spring Festival impacts foreign trade data at the beginning of every year," the GAC said in a press release.

The festival, an important time for family reunions, occurs in January or February along with a 40-day travel rush. It is due on Feb. 19 and the rush is estimated to cover 2.8 billion trips this year.

"The trade data always turns out discouraging at every year's beginning because of the Lunar New Year," Liu Xuezhi, a financial researcher with the Bank of Communications, explained. "The data thereafter can reflect the real situation of China's foreign trade."

He said withering exports, especially of labor-intensive industries, reveal the weakening advantage in formerly-dominant areas.

Labor-intensive industries including Machinery, garments, textiles, shoes, toys, furniture and plastics exports all saw remarkable drops last month.

He attributed the sharp decrease in imports to lower price of bulk commodities and ongoing industrial upgrades while phasing out overcapacity.

Li Jian, a researcher with the Ministry of Commerce, said the contraction in exports is partly caused by different economic situations of China's major trade partners.

He said the stable economic recovery of the United States can not offset the negative effects from the floundering Europe Union (EU), Japan and some emerging economies.

The GAC data showed that China's exports to the EU and Japan dropped 4.4 percent and 20.4 percent, respectively. Even exports from the mainland to Hong Kong contracted more than 10 percent in January.

Except for the slight import growth of 0.7 percent from China's Taiwan to the mainland, the imports from the other nine largest trade partners all ended in decline, the GAC said.

However, analysts forecast China's 2015 foreign trade will realize steady growth through a better trade environment and stronger policy supports for the "Belt and Road" initiatives, construction of more free trade zones and cross-border e-commerce, but risks and challenges remain.

They believe exports will face downward pressure in Q1 and the start of Q2, considering the disappointing result of GAC's latest survey of export companies and the further reduction in new export orders in last month's manufacturing purchasing managers' index (PMI).

The index, a key measure of factory activity in China, posted at 49.8 in January, fell below 50 for the first time since October 2012, while the new order index was 48.4, also lower from December's 49.1.

A reading above 50 indicates expansion, while a reading below 50 represents contraction.

GAC head Yu Guangzhou said the country will further balance the quality and quantity of export expansion with more policy support for competitive products and new industries, so as to improve the role of Chinese enterprises in the global value chain.

Meanwhile, the State Council, China's cabinet, has given the go ahead for GAC to release its trade data using yuan-denominated figures for this year.

Before 2014, the GAC mainly used the U.S. 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 expanded use of yuan.