China: Exports swing to contraction in March
April 11, 2018
Exports surprised to the downside in March and contracted 2.7% over the previous year, plunging from February’s 44.5% increase and missing market expectations of an 11.8% expansion. March’s print was the first contraction in over a year and reflected seasonal distortions at the outset of the year related to the Lunar New Year holidays. Moreover, the print was likely influenced by escalating trade tensions between the U.S. and China following U.S. President Trump’s proposed tariffs on several Chinese products.
Import growth accelerated to 14.4% in annual terms, gaining momentum from February’s 6.3% expansion and surpassing analysts’ expectations of a 12.0% increase.
Due to the decline in exports, the trade balance came in at a USD 5.0 billion deficit in March, the first trade deficit in over a year, and well below the USD 22.5 billion surplus recorded in the same month a year prior (February 2018: USD 33.7 billion surplus). The 12-month moving sum of the trade surplus dropped from USD 438 billion in February to USD 410 billion in March.
Author: Lindsey Ice, Economist