China’s trade tumbles in Feb, signals worsening economic scenario

Only few Chinese products managed to register comprehensive exports growth and those included coal & ignite at 54.4% and integrated circuit at 6.8% The Dollar Business Bureau

The Chinese government acknowledged the country’s worsening economic scenario projecting a 6.5-7% GDP growth for the year 2016-17.

China’s foreign trade tumbled much sooner than expected in February, dragged by poor global demand, slow domestic consumption and business shutdown on the Lunar New Year long holiday leading to flattening of sales. Exports shrank for the eighth consecutive month in February this year, by 25.4% to $126.1 billion, the country’s steepest decline in exports since May 2009. In January this year, outbound shipments had contracted by 11.2%. Imports, too, got trimmed by 13.8% to $93.5 billion from 18.8% recorded in January. This significant decline in China’s trade has brought down the country’s overall trade surplus to just $32.59 billion in February - the smallest trade surplus after almost a year - from $60.61 billion a year ago. Among the exported products and articles, crude registered the maximum decline at 74%, followed by mineral fertiliser 40.8%, semi-coke 35.8%, steel 34.7%, ceramic 34.4%, shipping 30.6%, aluminum 30.5% and herbal and medicine 24.6%. Only few products managed to register a comprehensive exports growth, and those included coal & ignite at 54.4% and integrated circuit at 6.8%. The country’s outbound shipments to the following countries declined drastically - Brazil by 50.3%, South Africa (37.3%), ASEAN countries (24.8%), New Zealand (23.1%), the US (15.7%), the EU (15.4%) and India (5.6%). A continuous decline in China’s trade (the world’s second largest economy) confirmed the fears of global economists and financial analysts of a further weakening in global trade. Many predict the slowdown to continue in the coming months as China looks to shift its economy from manufacturing-based to consumer-based. But there is also a contradictory sentiment among some economists who believe that the decline may be due to the long Lunar New Year holidays that fell in February, and it necessarily may not point to China’s worsening economic situation. Last week, ahead of China's national legislature meeting, the Chinese government acknowledged the country’s worsening economic scenario projecting a 6.5-7% GDP growth for the year 2016-17.

March 08, 2016 | 05:11pm IST.

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The Dollar Business Bureau - Mar 08, 2016 11:39 IST

China’s trade tumbles in Feb, signals worsening economic scenario

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