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China February exports tumble unexpectedly, heighten slowdown fears

Date 12-March-2014
Subject China February exports tumble unexpectedly, heighten slowdown fears

China's exports unexpectedly tumbled in February, swinging the trade balance into deficit and adding to fears of a slowdown in the world's second-largest economy despite the Lunar New Year holidays being blamed for the slide.

The sharp drop in exports follows a series of factory surveys since the start of 2014 that point to weakness in economic activity as demand falters at home and abroad.

Exports in February fell 18.1 percent from a year earlier, following a 10.6 percent jump in January, the General Administration of Customs said .

Imports rose 10.1 percent, yielding a trade deficit of $23 billion for the month versus a surplus of $32 billion in January. That compares with market expectations in a Reuters poll of a rise of 6.8 percent in exports, an 8 percent rise in imports and a trade surplus of $14.5 billion. Analysts cautioned against reading too much into single-month figures for January or February, given possible distortions caused by the long Lunar New Year holiday, which began on January 31 and covered early February.

Still, combined exports in January and February fell 1.6 percent from the same period a year earlier, versus a 7.9 percent full-year rise in 2013. Imports rose 10 percent year-on-year in the first two months, compared with a 7.3 percent rise in 2013.

"February export numbers were a surprise on the downside, and even combined January-February numbers were below market expectations," said Li Heng, an economist at Minsheng Securities in Beijing.

"The data shows that the economy faces relatively big downward pressures and macro-policies need to be loosened a bit." The government may step up fiscal spending to support some investment projects if growth slows further, given there is limited room for the central bank to loosen policy, Li said.

Exports to the United States edged up 1.3 percent in the first two months from a year earlier, while sales to the European Union rose 4.6 percent, according to official data. China's annual economic growth slowed to 7.7 percent in the fourth quarter from 7.8 percent in the previous quarter, and economists polled by Reuters expected growth to slow further to 7.6 percent in the first quarter of 2014.

Source : dailyshippingtimes.com

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