(RTTNews) - China’s exports continued to decline for the second straight month in December as slowing global economy reduced demand for Chinese products.

Official data released Tuesday showed that overseas sales fell 2.8% year-on-year in December, quicker than November’s 2.2% drop. However, the decline was slower than a 5.3% fall economists expected. A year ago, exports grew 21.7%. According to the China Daily, exports have fallen two months in a row for the first time in a decade.

The current business atmosphere in China is not as encouraging as it was earlier due to the impact of worsening global economic conditions. According to recent official reports, China’s business confidence indicator and business climate indicator dropped in the fourth quarter.

As factory closures and layoffs left many unemployed, fears of a social unrest is surrounding the Chinese economy. Companies are requested to stop reducing the number of employees.

Imports were down 21.3%, a bigger decline compared to the 17.9% fall recorded in November and the 20% drop expected by economists.

In December, China dispatched commodities worth US$ 111.2 billion and imported commodities worth US$ 72.2 billion. Hence, the trade balance showed a surplus of US$ 39 billion in December, higher than analysts’ expectations that called for a surplus of US$ 34 billion.

In a move to ease the borrowing cost, the Chinese central bank, in December, reduced its key interest rates for the fifth time since September 2008. The People’s Bank of China slashed one-year lending rate by 27 basis points to 5.31% from 5.58%.

Late in December 2008, the central bank had said it would adopt a moderately loose monetary policy in 2009. The central bank stated that it would ensure sufficient liquidity in the financial system and also promote steady growth in money supply and lending.

The Chinese economy grew 9% in the third quarter of 2008, marking the slowest expansion in nearly three years. The World Bank forecast China’s GDP growth rate to slow to around 7.5% in 2009 from 9.4% in 2008 and said export growth would be possibly low at around 3.5% in 2009 compared to 11% in 2008.

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