China’s exports slumped 25.4 per cent in February compared to a year earlier, the biggest decline since May 2009, while imports in the world’s biggest trading nation were down 13.8 per cent, the 16th successive month of decline.
Exports fell to $126.1 billion (€114.41 billion), compared to a 11.2 per cent decline in January, while imports shrank 13.8 per cent to $93.5 billion (€84.83 billion), which marks an uptick on January’s 18.8 per cent contraction.
China’s economy grew 6.9 per cent last year, its lowest rate of expansion in a quarter century. At the National People’s Congress at the weekend, Premier Li Keqiang set a target of 6.5 to seven per cent this year but many analysts are now expecting the economy to undershoot this range.
The slump in exports was twice as large as analysts had expected and losses were in all the major markets.
“Exports got pummelled again in February, highlighting the downturn in global demand,” Frederic Neumann, co-head of Asian economic research at HSBC Holdings in Hong Kong, told Bloomberg. “Hopes for a global rebound need to be tempered with numbers like these. It’s easy to blame Chinese New Year distortions, but there is a much deeper malaise that is becoming apparent in the numbers.”
February figures were hit by weeklong Chinese new-year holidays, which cause factories to close their gates and delays in shipments.
The data leaves China with a trade surplus of $32.6 billion (€29.6 billion), and highlights the difficulties the leadership faces in keeping growth stable in the face of an uncertain global outlook.
Trade with China’s biggest trade partner, the European Union, dropped
9.7 per cent year on year in the first two months of 2016, data from the General Administration of Customs (GAC) showed, in yuan terms.
China’s trade surplus with the European Union contracted by one-third to $10 billion (€9.07 billion).
Exports were down more than 20 per cent to the US, Brazil, Canada, Germany, France, Hong Kong, Japan, and ASEAN nations.
In his speech to the NPC on Saturday, Premier Li said it would be “a tough battle” to keep the economy growing by at least 6.5 per cent over the next five years, while pushing hard to create more jobs while restructuring state-owned enterprises.
There were further signs of ongoing decline in some of the country’s traditional export sectors, in labour-intensive products such as toys and shoes, which fell 12.4 per cent in the first two months of the year.
(Additional reporting Bloomberg)
