Made-in-China goods have filled shelves from Tesco to Burberry as consumers across the West have snapped up huge quantities of cheap products from Asia’s economic powerhouse. But exports from the “workshop to the world” have suddenly begun to fall sharply and may have shrunk last month in the latest dramatic symptom of global recession.

Preliminary estimates from China’s customs authorities showed that its exports for November were worth about $100 billion (£68 billion), according to local media reports. If confirmed, this would mark the first monthly fall in exports in more than seven years. In November last year, exports were worth $108 billion.

The emerging trend will stoke worries not only over Chinese economic prospects but also that a looming collapse in global trade will greatly aggravate the worldwide economic slump, increasing the danger of a Thirties-style Depression taking hold.

Official Chinese trade figures are expected to be released tomorrow and are almost certain to make for grim reading in a country that in four years has transformed itself into a leading exporting nation. In October, exports were valued at $128 billion, a rise of 19.2 per cent from the previous year.

The 21st Century Business Herald said that Beijing officials were alarmed by the latest estimates. “The dramatic fall in import and export volumes has shocked policymakers,” it said, adding that customs authorities were giving government leaders daily estimates of trade flows. Previously, they provided this data only every ten days.

If China’s exports do fall, it will confirm a trend that has spread across other Asian exporting powerhouses since the collapse of Lehman Brothers, the US investment bank, in mid-September. The escalation of the credit crisis since then has led banks to retreat from mundane corners of banking, such as trade finance. The result has left export-import companies across Asia scrambling for credit.

Anecdotal evidence from logistics and shipping companies suggests that China has been as badly hit as Malaysia, South Korea and Taiwan. Taiwan’s exports in November slumped by almost a quarter from a year earlier, the sharpest drop in seven years. That severe contraction comes after South Korea said that November shipments had fallen by 18 per cent.

If reports of tumbling exports are officially confirmed, it will help to explain why China rushed out its four trillion yuan stimulus package and has slashed interest rates. Three rounds of tax breaks have already been announced since July, including an increase in rebates on sales tax, and there is speculation that there will be more to come.

Export-orientated factories in southern China have been closing in their thousands in recent weeks and migrant workers are streaming home in the hundreds of thousands for the new year holiday, months earlier than usual. The ripple effect is spreading to industries such as shipbuilding, where orders have collapsed, and China is scrambling to bolster economic growth.

The weakness in exports has also fuelled speculation that this explains why the authorities last week allowed the yuan to dip against the dollar.

Even if export growth slows sharply, China’s import bill is coming down just as quickly, partly because commodities prices have slumped. The country is still tipped to register a trade surplus for last month that is close to October’s $35.2 billion record. Imports are falling not just because of weak domestic demand – as much as half of all imports enter China for processing for eventual reexport.

Sudden fall

$128bn value of Chinese exports in October

$100bn estimated value of Chinese exports in November

$108bn value of Chinese exports in November 2007

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