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China Exports Jump 22% in February From Year Ago

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China's exports jumped by a fifth in February from a year earlier, more than double expectations, but imports were much weaker than forecast, official data showed on Friday.

For January and February combined exports rose 23.6 percent, while imports increased 5 percent, which compared with expectations for rises of 17.6 percent and 10.0 percent respectively.

Analysts look at the combined figures because of distortions caused by the Lunar New Year holidays, which fell in January in 2012 and in February this year. Reading too much into one month's data is a particular risk given the undeniable impact of the nationwide holidays.

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"Exports in January and February were both quite strong," said Sun Chi, an economist at Daiwa in Hong Kong.

"This shows a recovering trend and is a good picture. For imports, we need to figure out if demand is falling or whether the weakness is due to prices."

The stronger exports figures were borne out by comments from China's third-largest port operator, Ningbo Port Group.

"Our data in the first two months shows the foreign trade situation is improving," Chairman Li Linghong told Reuters ahead of the trade data.

Ningbo port's container volumes rose 13.6 percent in January and February from a year earlier and cargo volumes increased 12.4 percent, Li said.

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"Usually the first two months are a peak season for companies to deliver orders, but it still shows the demand from the international market," he said.

Fragile

Still, the signs of recovery remain fragile after 2012 trade fell short of China's 10 percent growth target as major demand centers including the euro zone and the United States struggled to pick up from the global financial crisis.

That was underlined by a decline in both new export orders and imports in China's official manufacturing purchasing managers' index (PMI) in February.

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That would hurt exports at a headline level and reduce imports to feed production lines in China's massive factory sector, which remains levered to foreign demand.

Trade is the first of a set of monthly data due in coming days.

Industrial output data for January and February -- combined to smooth out the impact of the Lunar New Year -- may show a rise of 10.5 percent on the year when the numbers are published, a Reuters poll shows.

Up from 10.3 percent in December, the figures due on Saturday might still disappoint those who expected more following a pick-up in economic growth in the fourth quarter of 2012.

China's economy expanded by 7.9 percent in the fourth quarter from a year earlier, bouncing from the 7.4 percent rate of the third quarter, the slowest three months of growth in the country since the first quarter of 2009 when the global financial crisis raged.

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Inflation and retail sales data are due for release alongside industrial output.

Economists polled by Reuters expected retail sales growth of 15 percent year on year for January and February combined, in line with the pace at the end of 2012.

The consumer price index meanwhile may have spiked to 3.0 percent in February from 2.0 percent in January almost entirely as a consequence of Lunar New Year effects on food costs.

China's own official statisticians seek to avoid the distortions in industrial output, fixed asset investment and retail sales data by publishing combined numbers for the first two months of the year.

Contact Asia Economy

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