BEIJING (TIP): China reported an unexpected contraction in exports in March, raising the danger of job losses as Beijing tries to overhaul its slowing economy. Trade data on Thursday showed exports fell 6.6 percent from a year earlier, well below analysts’ expectations of growth in low single digits.

Imports contracted by 11.3 percent, highlighting the weakness in Chinese growth. China’s leaders are counting on relatively strong export growth this year to help support employment while they try to build up domestic consumption and reduce reliance on investment in factories and infrastructure. Unexpectedly weak exports could undermine those efforts.

In a sign of official concern about job losses, the Chinese leadership launched a mini-stimulus last month based on higher spending on construction of railways, low-cost housing and other projects. Some analysts have cautioned this year’s trade figures are distorted by comparison with unreliable data issued last year. They say exporters last year inflated the value of goods sold abroad as a way to evade Chinese currency controls and bring extra money into the country.

“While the export data will add to worries among policymakers and in the market about growth slowing down precariously or China losing competitiveness, we would caution against such interpretations,” said RBS economist Louis Kuijs in a report. Kuijs said that with data distortions factored out, China’s exports in March might have grown by as much as 5.2 percent, on par with South Korea. March’s trade decline came after exports shrank by 18.1 percent in February.

China’s global trade balance returned to a surplus of $7.7 billion after running a deficit in January and February. “Improving conditions in developed economies should continue to support Chinese exports,” said Julian Evans-Pritchard of Capital Economics in a report. “In contrast, we expect import growth to remain relatively weak as slowing investment spending is likely to weigh on imports of commodities and capital goods.”

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