February export growth plunged to 2.4 percent as businesses were idled for the weeklong Lunar New Year holiday while imports of higher-priced oil and other goods rose 19.4 percent for a deficit of $7.3 billion, data showed.
The February slump offset January’s 38 percent jump in exports as suppliers rushed to fill orders before the Lunar New Year shutdown.
Many analysts group together January and February trade data to screen out distortions from the holiday, which falls on different dates within the two months each year.
Analysts said the February deficit was likely to be temporary and China should return to surplus in coming months.
For the January-February period, exports rose 21.3 percent to $247.5 billion while imports gained 36 percent $248.4 billion, for a deficit of $900 million.
That export growth was down only slightly from the 28 percent rate of the second half of last year, said Citigroup economist Minggao Shen.
Exports are “moderating, which is expected, but not by much,” Shen said. February’s trade gap “is due mostly to relatively fast import growth.”
A smaller trade surplus might help to ease trade strains with Washington and other governments that complain Beijing is giving its exporters an unfair advantage with currency controls and other policies.
Stronger imports could help economies that are looking to China’s robust growth to drive demand for their goods.
Imports also might benefit from government efforts under way to boost consumer spending to reduce reliance on exports and investment.
China is a major importer of oil, iron ore and raw materials and runs a deficit with suppliers such as Saudi Arabia and Australia. It pays for that by running multibillion-dollar surpluses with the United States and Europe.
Weak consumer demand in the West helped to narrow China’s February trade surpluses with the US and Europe.
The gap with the US fell 23.7 percent from a year ago to $8 billion. The surplus with the 27-nation European Union, Beijing’s biggest trading partner, declined 30.3 percent to $7.6 billion.
Chinese purchases from major exporters of minerals and farm goods surged, driven by higher prices. Imports from South Africa were up 174.6 percent, from Canada by 114 percent and from Australia by 53.6 percent.
Analysts expect a Chinese global trade surplus this year of $160 billion-$200 billion but say that should narrow if oil and commodity prices stay high. Last year, China ran a trade surplus of about $16 billion a month.
Mark Williams of Capital Economics said he estimated the surplus would have stayed at that level in January and February if commodity prices were unchanged from a year ago.
“Leading indicators of export demand and past experience both suggest that the surplus will rebound strongly in the months ahead,” Williams said in a report.
“February’s numbers do not point to a dramatic slowdown either in China or abroad.”
January-February exports were $247.5 billion while imports were $248.4 billion, producing a deficit of $900 million, customs data showed. In February, exports were $96.7 billion while imports were $104 billion.
Commerce Minister Chen Deming said Monday that imports should rise this year, possibly narrowing the trade gap, as the communist government promotes consumer spending to reduce reliance on exports and investment to drive growth.
Plans call for raising household spending power through wage hikes and subsidies to poor families.
“Our foreign trade policy principle this year is `stabilize exports, promote imports, reduce the surplus’,” Chen said. Still, he said Beijing had no plans to de-emphasize exports and expects a trade surplus for the year.
Imports also are being driven by economic growth that hit 10.3 percent last year. This year, the International Monetary Fund is forecasting a 9.6 percent expansion.
This week, the Cabinet’s planning agency said China should avoid a “double dip” slowdown in growth — a positive sign for economies that are counting on Chinese demand to help drive sales of their goods.
Meanwhile, China’s trade is starting to reflect the impact of rising Chinese wages and other costs that are forcing exporters to hike prices for foreign customers.
Producer prices rose 6.6 percent in January and analysts expect elevated inflation through at least the middle of this year due to strong demand and high global commodity prices.
Global Sources, a company that connects Chinese suppliers with foreign customers, said last month that 74 percent of companies responding to a recent survey raised prices last year by up to 20 percent due to higher costs for materials and components.
A separate Global Sources survey found 31 percent of companies that responded were increasing purchases from Vietnam due to higher Chinese prices.
