China's February exports surge, topping forecasts

An employee works at a garment factory, which exports products to Europe, in Hefei, Anhui province January 19, 2015.
Reuters
An employee works at a garment factory, which exports products to Europe, in Hefei, Anhui province January 19, 2015.

China's exports surged 48.3 percent on year in February, sharply above analysts' forecasts, potentially signaling stronger economic growth for its trade partners.

Imports fell 20.5 percent for the period, according to data from China's customs department. A Reuters poll had forecast exports would rise 14.2 percent and imports would fall 10 percent.

For January and February combined -- a common metric to help smoothe distortions from the Lunar New Year holiday period -- exports rose 15 percent from a year earlier, while imports declined 20.2 percent.

"The demand from the advanced economies bodes well," ANZ said in a note Sunday, citing data showing shipments to the U.S. and European Union rose 40.3 percent and 36.6 percent on-year respectively.

But the bank noted that the jump in exports could be due to a base effect. "The February 2014 figures were extremely low as Chinese authorities cracked down the round-tripping trade flows," it said. "We still see strong headwinds facing China's exports this year," ANZ said, citing weak export order PMI data.

ANZ attributed the decline in imports to weak commodity demand compounded by sharp drops in commodity prices, citing as an example the 45.4 percent on year drop in the value of iron-ore imports, although the iron-ore import volume only fell 0.9 percent.

As well, "Chinese commercial banks have significantly tightened the trade financing facilities for commodity traders," ANZ said.

This story is developing. Please check back for further updates.