“The contraction in China’s exports deepened last month but this weakness should soon reverse as seasonal distortions fade”, said Capital Economics in a note.
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Trade by private firms, which accounted for almost 40 percent of the country’s total, slipped 7.3 per cent year on year in the January to February period.
While that partially explains the ugly import decline registered in February, it offers little explanation as to why demand for Chinese exports – off a whopping 25.4% over the past year – remains worryingly weak.
Still, January-February exports on a combined basis, which should iron out some of the holiday effect, fell 17.8 per cent and imports 16.7 per cent, pointing to persistently weak demand at home and overseas that is weighing on the economy of the world’s largest trading nation.
February’s imports also jumped 27.4 percent on the previous month to hit 31.80 million tonnes, or 8.0 million barrels per day (bpd) C-CNIMP-PRM .
China’s February trade performance was much worse than economists had expected, with exports tumbling the most in over six years and imports also sliding.
For a summary of China’s commodities trade see [TRADE/CN].
The ruling party refrained from announcing a growth target for this year’s trade after exports contracted by 2.8 per cent last year.
As the decline in exports outpaced the fall in imports, the trade surplus narrowed sharply to $32.6 billion from $63.29 billion in the prior. Economists had forecast a 15 percent drop after the 11.2 percent drop in January. Commerce minister Gao Hucheng said last month that he was confident that China’s trade conditions would stabilise and improve in 2016, though most analysts see no improvement in sight. To the United States, its second-biggest market, they fell 10.9 percent.
Disappointing economic data so far this year haven’t done much to shore up confidence in Beijing’s ability to engineer a smooth transition to an era of slower growth.
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For its 13th five-year plan covering 2016-2020, the Chinese government has outlined its aim to maintain average growth rate of 6.5%; achieve employment creation of at least 50m, an urbanization rate of 60% by 2020, and build 30,000 kilometers (km) of high speed rail, among others.
