Mainland exports had their steepest slump on record last month as the global financial crisis cut demand for Chinese goods, but in a sign Beijing's stimulus package is kicking in, capital spending accelerated. Exports fell 25.7 per cent from February last year, while imports dropped 24.1 per cent, the General Administration of Customs said. The February data signalled the fourth consecutive monthly decline and the steepest fall since records were first made available in 1993. The Shanghai share market fell 0.91 per cent yesterday, underperforming regional markets in response to the weaker than expected export figures. The National Bureau of Statistics said fixed-asset investment in urban areas jumped 26.5 per cent in the first two months from the same period last year to 1.03 trillion yuan (HK$1.17 trillion), outstripping last year's 26.1 per cent rise. Both exports and capital investment have played a key part in powering the world's fastest-growing key economy. Premier Wen Jiabao had said the country 'must not slacken efforts' to promote exports, despite plunging external demand. The government estimates more than 20 million migrant workers have lost their jobs because of the closure of thousands of export-oriented factories in the coastal regions. Investment bank Merrill Lynch said the export numbers were ugly, but fixed investment came in above expectations. 'This illustrates the opposing forces acting on the Chinese economy: contracting global demand but positive policy stimulus,' said Timothy Bond and Ting Lu, economists at Merrill. 'We expect policy to stabilise growth, and maintain 8 per cent growth for 2009.' Economists said last month's export decline was disappointing because there were more working days than February last year. The Lunar New Year holiday fell in February last year and January this year. Ben Simpfendorfer, an economist with Royal Bank of Scotland Group, said the biggest shock figure was the fall in the trade surplus, which came in at a three-year low of US$4.84 billion last month, compared with US$39.1 billion in January. Mr Simpfendorfer said he expected foreign exchange reserves to decline as the trade surplus narrowed, but saw no change in the yuan exchange rate. According to the statistics bureau, investment in central government projects soared 40.3 per cent to 107 billion yuan from January to February, compared with a 29.6 per cent increase for all of last year. Investment in local government projects jumped 25.1 per cent to 920.6 billion yuan for the same period, compared with a 25.7 per cent increase for all of 2008. Sun Mingchun of Nomura International said the strong investment data suggested the impact of the government's 4 trillion yuan stimulus package was being felt. 'We expect fixed-asset investment growth to rise further in the months ahead.'