Chinese trade data produced another horror show in February with steep declines registered in both imports and exports for the month.
From a year earlier exports fell by 25.4%, more than doubling expectations for a decline of 12.5%. Not only was it far steeper than the 11.2% contraction seen in January, it was also the largest seen since May 2009.
On the other side of the ledger, imports slid by 13.8%, again below forecasts for a drop of 10.0%. Despite the continued decline, it was an improvement on the 18.8% drop registered previously.
As a consequence of the movements in exports and imports, the trade surplus came in at US$32.59 billion, significantly below forecasts for a smaller narrowing to US$50.15 billion.
It was the smallest monthly surplus recorded since March last year, indicating that the timing of the week-long Lunar New Holiday may have contributed to the ugly trade performance seen during the February.
Still, when January and February’s figures are combined – something many analysts look for given the seasonality distortions seen at this time of year – both exports and imports contracted sharply from the levels of a year earlier.
Exports tanked 17.8%, marginally outpacing a 16.7% drop for imports.
While commodity price movements go some way to explaining the weak import figure, the sharp drop in export demand remains a concern.
As a closely watched barometer for the global economy, this performance suggests it’s not looking good.
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