China: China posts largest trade deficit on record in February
March 10, 2012
In February, exports rebounded to 18.4% over the same month last year, after declining 0.5% in January. Despite the improvement, the reading came in well below the 31.1% rise expected by the market. Meanwhile, imports expanded a strong 39.6% over the same month last year, which contrasted the 15.3% drop recorded in January and exceeded market expectations, which had imports rising 31.8%. As a result, the trade balance plunged into the red, swinging from a USD 27.3 billion surplus in January to a USD 31.5 billion deficit in February. The result was well below the USD 5.4 billion deficit expected by the market and represented, in fact, the largest shortfall on record. Although the January-February figures are highly affected by the Lunar New Year holidays, when combining the first two months of the year, the trade deficit was still USD 4.2 billion, which more than doubles the USD 2.0 billion observed in the same period last year.