By any accounting China’s trade performance in February was weak and worrying – even after taking into account the Lunar New Year holiday and the impact of the week or more break in production, exports and imports (but not retailing and spending by consumers).
The Lunar New Year also fell in February last year (the 19th, against the 8th this year), so there is a fairly accurate comparison to be made between the two months and the comparison is not encouraging.
China’s exports in dollar terms fell for the eighth straight month in February from February 2015.
They dropped 25.4% in US dollar terms (a quarter) after an 11.2% slide in January (exports were dragged forward into January from February because of the Lunar New Year break, as were imports).
Imports in February fell 13.8% from the same month in 2015, compared with an 18.8% drop in January, suggesting a further cooling of demand in China.
As a result, China’s trade surplus all but halved in February to $US32.59 billion from $US63.29 billion in January, falling short of the median market forecast of a $US51.25 billion surplus.
In yuan terms, China’s exports fell 20.6% in February from a year earlier, following a drop of 6.6% in January. Imports in February also declined 8% in yuan terms from a year earlier compared with a 14.4% decrease in January.
The country’s trade surplus narrowed in February to 209.5 billion yuan ($32.2 billion) from 406.2 billion yuan in January. In February 2015, China’s exports jumped 48.3% year on year, and imports dropped 20%.
According to Reuters, the on-year decline in exports in February was the steepest since May 2009.
ANZ economist Ray Yeung said yesterday the results were disappointing and reflected a generally weakening global trade picture.
Mr Yeung noted that despite the Lunar New Year distortions, the average 12.6% fall in exports over January and February combined, when compared with the overall 1.7% drop in the fourth quarter of 2015, showed China’s trade performance has worsened noticeably.
Meanwhile, imports fell 13.2% year-on-year in January-February, from a 8.3% slide over the December quarter, reflecting continuing low commodity prices (although that turned late in the month) and weak domestic demand.
