China: Trade balance turns negative in February
March 10, 2011
In February, the trade balance swung to a USD 7.3 billion deficit, after recording a USD 6.5 billion surplus in January. Exports slowed markedly, increasing 2.4% year-on-year (January: +37.7% yoy) to total USD 96.7 billion. Imports also decelerated markedly, expanding 19.4% yoy (January: +51.0% yoy). Both results were well below market expectations that exports would expand 25.0% and imports would rise 32.0%. Nevertheless, the erratic shifts observed in January and February is entirely due to the Chinese New Year. In the first two months of 2011, exports grew 21.3% and imports rose 35.9% over the same period the year before. The trend for both exports and imports is slowing after the buoyant growth rates recorded in the period immediately following the crisis. That said, exports are decelerating more markedly as strong domestic demand and rising oil prices buttress import growth for the time being. Hence, the trade surplus for the moving 12 months fell from USD 177 billion in January to USD 162 billion in February.