China’s exports tumbled the most in three years in February while imports fell for a third straight month, pointing to a further slowdown in the economy despite a spate of support measures.
While seasonal factors may have been at play, the shockingly weak readings from the world’s largest trading nation added to worries about a global slowdown, a day after the European Central Bank slashed growth forecasts for the region.
Asian stock markets and U.S. futures extended early losses after the data. Chinese stocks sank over 3 percent.[MKTS/GLOB]. Global investors and China’s major trading partners are closely watching Beijing’s policy reactions as economic growth cools from last year’s 28-year low.
February exports fell 20.7 percent from a year earlier, the largest decline since February 2016, customs data showed. Economists polled by Reuters had expected a 4.8 percent drop after January’s unexpected 9.1 percent jump. “Today’s trade figures reinforce our view that China’s trade recession has started to emerge,” Raymond Yeung, Greater China chief economist at ANZ, wrote in a note.
“Chinese exports already registered negative growth in December. The strong figures in January were not reliable due to distortions from the Lunar New Year holiday period.”
Imports fell 5.2 percent from a year earlier, worse than analysts’ forecasts for a 1.4 percent fall and widening from January’s 1.5 percent drop. Imports of major commodities fell across the board. ADVERTISE YOUR BUSINESS HERE
That left the country with a trade surplus of $4.12 billion for the month, much smaller than forecasts of $26.38 billion.
Analysts warn that data from China in the first two months of the year should be read with caution due to business disruptions caused by the long Lunar New Year holidays, which came in mid-February in 2018 but started on Feb. 4 this year.
But many China watchers had expected a weak start to the year as factory surveys showed dwindling domestic and export orders and the Sino-U.S. trade war dragged on.