Exports in February slump due to Lunar New Year holiday

China's exports in February unexpectedly slumped amid festival distortions while imports maintained robust growth, reinforcing economic momentum in the world's second-largest economy.

Exports in February plunged 18.1 percent from a year earlier to $114.1 billion, the biggest decline since the global financial crisis in 2008, the General Administration of Customs said on Saturday. February imports registered the strongest gain since July and rose 10.1 percent year-on-year to $137.08 billion, leaving the country a trade deficit of $22.98 billion, the largest in two years.

In contrast, exports in January beat market expectations and surged 10.6 percent year-on-year while imports increased 10 percent.

"The fluctuation in February was mainly caused by the Lunar New Year holiday," customs administration spokesman Zheng Yuesheng told reporters on Saturday in Beijing.

The weeklong holiday, which fell on the last day of January and mid-February this year, drove Chinese exporters to front-load the production and exports, which enlarged January exports figures and shrank those in February, Zheng said.

Exports for January and February combined dropped 1.6 percent year-on-year, the most for that period since 2009 and in contrast to the 23.6 percent rise for the same period last year. Meanwhile, combined imports for the first two months of this year went up 10 percent year-on-year.

China's trade with the European Union, the country's largest trading partner, gained 6.3 percent year-on-year to $551.99 billion in the January-February period, while trade with the United States rose 4.8 percent to $499.05 billion. Trade with ASEAN countries went up 4 percent to $413.63 billion and trade with Japan rose 2.9 percent to $290.77 billion in the same period despite prolonged tensions. The mainland's trade with Hong Kong decreased 23.6 percent year-on-year to $286.65 billion in the first two months.

"Seasonal distortion will fade away in March and exports will probably return to normal. The trade support measures launched by the central government since the second half of last year will remain in place. Economic recovery in developed economies will also create favorable conditions for China's export growth," Zheng said while noting the overall trade figures for the first three months of this year will provide a clearer picture.

Louis Kuijs, chief economist in China at the Royal Bank of Scotland, said in a statement that over-invoicing issues deflated the export growth data in recent months, especially in February.

China's export figures were overstated earlier last year by speculative fund inflows disguised as trade payments to chase high returns at home.

"In our view, the modest underlying export growth in early 2014 reflects a still-tepid recovery in global demand," Kuijs said. "Robust import growth in early 2014 signals that domestic demand momentum has held up. Going forward, we expect underlying export growth to continue to develop reasonably and favorably in 2014 amid gradually improving global demand momentum while import growth may slow down somewhat because of the firming-up of the monetary stance."

lijabao@chinadaily.com.cn