China's February imports surge, exports growth slows

Cornelia Mascio
Marzo 21, 2017

China's imports surged nearly 40 percent last month, data showed Wednesday, fulled by higher commodity prices and strong domestic demand, bolstering hopes that the world's number two economy is getting back on track.

That led to a monthly trade deficit of 60.36 billion yuan (8.74 billion US dollars), in contrast with a surplus of over 354 billion yuan in January.

That could give China's policymakers more confidence to press ahead with oft- delayed and painful structural reforms such as tackling a mountain of debt.

'We suspect that this largely reflects the boost to import values from the recent jump in commodity price inflation, but it also suggests that domestic demand remains resilient, ' Julian Evans-Pritchard at Capital Economics said in a note.

China's first-quarter economic growth could accelerate to 7 percent year-on-year, from 6.8 percent in the last quarter, economists at OCBC wrote in a note on Monday, while adding that the pace may ease starting in spring.

But he added that it was unlikely the current pace of import growth can be sustained as the impact of higher commodity prices will start to drop out of the calculations in coming months.

Exports only grew 4.2 percent in February, slowing from January's 15.9 percent, GAC data showed.

The forecast-beating 38.1 percent year-on-year import jump was nearly twice as high as the 20 percent increase tipped in a Bloomberg News survey, while exports fell 1.3 percent, missing the estimated 14 percent increase.

"With growth in China now running above trend and both monetary and fiscal policy being tightened, it is only a matter of time before we see a slowdown in domestic demand", Evans-Pritchard said.

February's data generally continued the growth momentum in China's foreign trade since the beginning of the year.

As in 2016, China did not set a target for exports in 2017, underlining the uncertain global outlook, but Li said China will take steps to steady exports this year.

Trade with the United States, ASEAN and Japan went up by 18.9 percent, 24.2 percent and 20.1 percent, respectively.

In the early days of his presidency Trump hasn't made good yet on his campaign pledges of greater protectionist measures, but analysts say the spectre of deteriorating U.S.

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