Why is China’s trade surplus still growing when its exports have collapsed?

REVISED figures published this week show that in 2007 China overtook Germany to become the world’s third-biggest economy. At the start of last year China also looked set to become the world’s biggest exporter, but for 2008 as a whole its exports remained smaller than Germany’s, because of a slump in the final months of the year. China’s exports tumbled by 13% (in dollar terms), in the fourth quarter, leaving them 3% lower in December than a year earlier. Yet, despite weak exports, China’s trade surplus rose to a record $457 billion at an annual rate in the fourth quarter—50% bigger than in the same period of 2007.