Chinese trade data produced another horror show in February with steep declines registered in both imports and exports for the month.
From a year earlier exports fell by 25.4%, more than doubling expectations for a decline of 12.5%. Not only was it far steeper than the 11.2% contraction seen in January, it was also the largest seen since May 2009.
That was only months after the height of the global financial crisis.
On the other side of the ledger, imports slid by 13.8%, again below forecasts for a drop of 10.0%. Despite the continued decline, it was an improvement on the 18.8% drop registered previously.
As a consequence of the movements in exports and imports, the trade surplus came in at US$32.59 billion, significantly below forecasts for a smaller narrowing to US$50.15 billion.
It was the smallest monthly surplus recorded since March last year, indicating that the timing of the week-long Lunar New Holiday may have contributed to the ugly trade performance seen during the February.
Still, when January and February’s figures are combined – something many analysts look for given the seasonality distortions seen at this time of year – both exports and imports contracted sharply from the levels of a year earlier.
Exports tanked 17.8%, marginally outpacing a 16.7% drop for imports.
While commodity price movements go some way to explaining the weak import figure, the sharp drop in export demand remains a concern.
As a closely watched barometer for the global economy, this performance suggests it’s not looking good.