To people in China's southern export bases like Guangdong and Zhejiang provinces, the celebration of the Year of the Ox was tempered with bitterness as exports plunged and the economy, like many others in Asia, cooled to its slowest pace in years.
Many hoped that the Lunar New Year, which arrived a couple of weeks earlier than usual on Jan. 26, would bring an early economic recovery.
Analysts believe this is possible, because amid the gloom of falling exports in the south, China can benefit from resilient consumer spending, strong investment growth spurred by a massive stimulus package and an active government role in economic development.
Plunging exports, slowing growth
In Guangdong, which has the largest economy among China's provinces, tens of thousands of export-oriented factories make everything from toys to clothes, telecom devices and cars. Many of these companies have never experienced such a tough year as 2008, when overseas demand virtually evaporated as the financial crisis hit real economies around the world.
Yao Zhongwo's Sunrise Houseware, which produces non-stick cookware, was one of the small companies whose export orders virtually dried up. In the second half of 2008, plummeting demand from the United States and Europe, Yao's major markets, forced him to suspend work on a new factory and lay off workers.
"I have been doing business over the last 12 years. But I have never seen any leaner year than 2008 with so many difficulties," he told Xinhua.
The impact of the global financial crisis is clear and widespread. Many Guangdong exporters couldn't meet their 2008 goals. In November and December, the province's exports fell 5.1 percent and 6.8 percent respectively year-on-year. The last monthly drop for Guangdong's exports was in March 2002.
Last year, Guangdong's exports reached 404 billion U.S. dollars, up 9.4 percent from a year earlier. The growth rate, however, was 12.8 percentage points less than in 2007. It was also below the 10 percent target the province set in early 2008.
Liang Yaowen, director-general of the Guangdong Foreign Trade and Economic Cooperation Department, acknowledged that the financial crisis was having a severe impact on Guangdong. Exports account for about 75 percent of Guangdong's economy, vs. a national level of 32.6 percent.
"Last year, Guangdong received 30 percent to 40 percent fewer export orders than the previous year," he said. That decline indicates an even worse year for Guangdong's exports in 2009, given the timing difference between orders and deliveries, and provincial officials like Liang said Guangdong's exports faced an "unprecedented grim" situation this year.
Liang forecast Guangdong's exports might grow as little as 0.1 percent in 2009.
Since Guangdong's exports accounted for more than one fourth of the country's total of 1.43 trillion U.S. dollars last year, the provincial decline had a significant impact on national figures.
In November, China's exports fell 2.4 percent year-on-year, the first monthly decline since June 2001. In December, the decline was 2.8 percent.
The declines took some of the sizzle out of economic growth since exports, along with investment and consumption, was one of the three major factors driving the economy.
China doesn't provide an exact breakdown of those three components of gross domestic product (GDP), but domestic and foreign economists have estimated that foreign trade normally accounts for about 40 percent and investment for about 35 percent.