China recorded a surprise trade deficit in February, its first in three years, thanks to a a surge in imports after the Lunar New Year holiday and an unexpected drop in exports.
Exports fell 1.3% in February from the same month a year ago, following a rise 7.9% in January, according to US dollar trade data released by China’s General Administration of Customs .
Imports in February surged 38.1% from a year earlier, more than double the 16.7% growth in January.
Market forecasts missed the fall in exports and surge in imports.
As a result, China posted a trade deficit of $US9.15 billion in February, compared with a surplus of $US51.35 billion in January when the actual holiday fell.
Economists had been expecting a $US26.55 billion surplus.
The country’s trade figures tend to be volatile in the first two months of the year because the Lunar New Year holidays. The holiday began in late January this year and in February last year.
China’s exports for January and February combined rose 4.0% from the same period last year, while imports surged 26.4%, suggesting there has been solid improvement in demand at home and abroad despite any holiday distortions.
Higher prices for oil, coal, copper, iron ore and other commodities were also to blame, especially as they were depressed a year ago in the sell off at the start of 2016.
Earlier in the week, China had reported an unexpected 6.9% jump in its foreign exchange reserves in February. The People’s Bank of China said the world’s largest currency hoard surged to $US3.01 trillion, marking a strong rebound from a decline in January.
