Trade

China's trade figures disappoint ahead of GDP

China's March trade data: A 'mea culpa'?
VIDEO2:2102:21
China's March trade data: A 'mea culpa'?

China's exports surprisingly tumbled in March, official data showed on Monday, setting a poor precursor to the closely-watched first quarter growth figures due on Wednesday.

Exports tumbled 14.6 percent from the year-ago period, according to figures from the National Bureau of Statistics, which cited weak global demand and the impact of the lunar new year as factors behind the decline.

This compares with a rise of 12 percent rise predicted by a Reuters poll and following the 48.3 percent surge in February.

Imports meanwhile slid 12.3 percent, a tad worse than the expected 11.7 percent fall and after diving 20.5 percent in the month before. The trade surplus for the month totaled $3.08 billion as a result, short of the $43.8 billion forecast.

"Put in USD terms, March imports fell 12.7 percent, above the street's view of a 10 percent decline. Exports fell 15 percent relative to expectations of 9 percent growth. As a result we saw an absolute collapse in the trade balance and it must put the risks for this Wednesday's Q1 GDP to the downside," said Chris Weston, chief market strategist at IG.

Workers manufacture blue jeans in Congshin textile factory in Xintang, Guangdong province, China.
Lucas Schifres | Getty Images

The news halted a week-long rally in the Australian dollar, which eased to $0.7630 from $0.7665 before the release of the data. Stock markets however were little changed: the rose 1.1 percent, while the Hang Seng index advanced 0.4 percent.

The March data are closely watched as they are the first batch of data typically unaffected by the distortions around the lunar new year, which tend to skew January and February figures.

"The real problem with China trade data like this is, China doesn't make economic revisions. So this is a little bit of a mea culpa, I believe, for that 45 percent export number that came out last month. That was way overshot, i think this is a little bit of an under report," said Tony Nash, Vice President at Delta Economics.

Read MoreWorld Bank pares China, East Asia growth forecast

China's economy has be hurt in recent years by a weak external environment, slowing property market and weak domestic consumption.

All eyes are on the first-quarter gross domestic product figures, which are expected to show the world's second biggest economy growing 7.0 percent on year. Beijing has set 2015 growth target at "around 7 percent," after the economy grew 7.4 percent in 2014, the slowest pace in 24 years.

"A bigger than expected slide in both March exports and imports have raised concerns about the prospects of the Chinese economy hitting its 7 percent GDP target later this week," said Michael Hewson, analyst with CMC markets.

"If industrial production and retail sales [due Wednesday] also disappoint, which seems a distinct possibility now, we can expect that any disappointment in this week's Q1 GDP number to translate into a rising expectation of further easing measures," he added.

Since November, the People's Bank of China has unleashed a series of stimulus measures, including cutting interest rates twice and lowering the reserve requirement ratios of major banks once.