Surge in China exports fuels recovery hopes
Agence France-Presse in Beijing
China’s exports surged more than 20 per cent in February on-year despite the Lunar New Year holiday, data showed Friday, in another sign of recovery for the world’s second-largest economy.
The jump in exports helped China to record a surprise trade surplus of US$15.3 billion in February, although it narrowed from US$29.2 billion in January, the General Administration of Customs said in a statement.
The market had expected a trade deficit of US$16 billion, according to the median forecast in a poll of 13 economists by Dow Jones Newswires.
Exports jumped 21.8 per cent year-on-year to US$139.4 billion in February, while imports dropped 15.2 per cent to US$124.1 billion, customs said.
Analysts said the strong exports growth was a good sign for the economy, but suggested the weakness in imports may have been due to factories shutting down for the week-long holiday, reducing demand for raw materials and components.
“The import data may have been affected by the seasonal factor of the Lunar New Year, but exports were not affected at all, growing faster-than-expected,” Liu Ligang, a Hong Kong-based economist for bank ANZ, told AFP.
“China will undoubtedly remain on a recovery track this year, with its economy likely growing more than eight per cent,” he said.
China’s commerce minister said Friday that he expected China’s overall growth in trade – imports and exports combined – to improve this year from last year, although he warned about unforeseen global problems.
“I’m cautiously optimistic about this year’s general trade situation. We should do better this year,” Chen Deming told reporters on the sidelines of the National People’s Congress, or legislature.
China’s total foreign trade grew just 6.2 per cent last year to US$3.87 trillion, falling short of the government target of around 10 per cent growth.
The country’s top state planning body, the National Development and Reform Commission, has forecast eight per cent growth in foreign trade volume for this year.
Investors are looking to gauge the strength of China’s economic rebound after the economy grew an annual 7.8 per cent last year, its worst performance for 13 years, in the face of weakness at home and in key overseas markets.
On Tuesday at the opening session of the legislature, Premier Wen Jiabao set a target for 7.5 per cent economic growth this year, unchanged from the goal set for last year.
“The domestic economy is certainly recovering, but it’s still hard to tell the strength (of the recovery),” Zhang Zhiwei, a Hong Kong-based economist for Nomura Securities, told AFP.
Manufacturing activity in China expanded at its slowest rate in five months in February, official data showed earlier this month, with the official purchasing managers’ index (PMI) standing at 50.1.
PMI is a widely watched barometer of the health of China’s economy, with a reading above 50 indicating expansion while anything below points to contraction.
Despite the positive export data, the benchmark Shanghai Composite Index closed 0.24 per cent lower on Friday.