China Trade February 2016


China: Exports in February plummet to multi-year lows on seasonal effects and weak global demand

March 8, 2016

Exports in February plummeted at the fastest pace since the height of the financial crisis in 2009 as weak global demand is taking its toll on overseas shipments. The dismal reading stems from a high base of comparison from last year due to the different timing of the Lunar New Year. In February, exports fell 25.4% over the same period last year, which was more pronounced than the 11.2% decrease tallied in January. February’s contraction also surprised analysts on the downside as they had expected a softer drop of 14.5%.

Meanwhile, imports decreased 13.8% annually in February, which followed the 18.8% decline tallied in January. February’s drop exceeded the 12.0% fall that market analysts had expected and represented the 16th straight month of contraction, adding to concerns about the state of domestic demand in China.

As exports tumbled at the outset of the year, the trade surplus fell to the lowest level in 11 months. The trade balance fell from USD 60.6 billion in February 2015 to USD 32.6 billion in February this year. The 12-month moving sum of the trade surplus declined from January’s all-time high of USD 605 billion to USD 577 billion in February.

FocusEconomics Consensus Forecast panelists project that merchandise exports will grow 0.4% in 2016, while imports will decrease 1.1%, thus driving the trade balance to a surplus of USD 630 billion. For 2017, the panel expects exports to increase 3.0% and imports to rise 2.6%, while the trade surplus will widen further to USD 656 billion.

Author: Ricard Torné, Lead Economist

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China Trade Chart

China Trade12m February 2016

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-month sum of exports and imports in %.
Source: General Administration of Customs of the People’s Republic of China and FocusEconomics calculations.

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