China’s exports sink 20.7% in February, misses forecasts

The export reading last month was far lower than economists' estimates of a 4.8% decline, and a reverse from January’s bumper 9.1% expansion.

China Source: Bloomberg

China's February exports came in worse-than-expected as it slid 20.7% year on year, following a surprise bumper reading in the previous month amid the country’s ongoing trade conflict with the United States (US), data from China’s General Administration of Customs showed on Friday.

The export reading last month was far lower than economists' estimates of a 4.8% decline, and a reverse from January’s bumper 9.1% expansion which had overshot expectations.

Meanwhile China’s imports sank 5.2% in February, also below the estimates of a 1.4% decline and lower than the 1.5% fall in January.

At the opening of China’s National People’s Congress this week, China’s premier Li Keqiang said the Chinese economy will likely slow this year, forecasting economic growth target for this year to be between 6.0% and 6.5%. Last year, the country expanded by 6.6%, its slowest growth since 1990.

Seasonal factors could have impacted the bumper results in January and the sluggish performance in February as exporters tend to load their shipments ahead of the annual Lunar New Year festive period, which falls on different calendar dates every year. The Lunar New Year started earlier this year compared to last year.

But the decline in February is far too steep to attribute it completely to "seasonal factors". Factory activity worsened for last month, with the private and official purchasing managers’ indexes both in contractionary mode.

China has been broadly affected by the weakened trade due to the US-Sino trade conflict while it copes with slowing domestic demand.

Ironing out the trade deal

US officials are reported to be preparing a final trade deal both leaders can sign in weeks and the US is targeting a summit between the two leaders as soon as mid-March, people familiar with the matter told Bloomberg last week.

However in a report from The New York Times on Thursday, two people familiar with China’s stance said that Chinese officials are wary on being too hasty with the trade deal, suggesting that the final trade terms may be less favourable on China’s side.

‘The work team is still continuing to negotiate because we still have a lot to do,’ commerce minister Zhong Shan said on the side lines of the 11-day annual session of the National People’s Congress, which began on Tuesday.

Start trading forex today

Trade the largest and most volatile financial market in the world.

  • Spreads start at just 0.6 points on EUR/USD
  • Analyse market movements with our essential selection of charts
  • Speculate from a range of platforms, including on mobile

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only

Plan your trading week

Get the week’s market-moving news sent directly to your inbox every Monday. The Week Ahead gives you a full calendar of upcoming economic events, as well as commentary from our expert analysts on the key markets to watch.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider.You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.