China February exports tumble amid global uncertainty

Peter Parks | AFP| Getty Images

China's exports in February tumbled 18.1 percent from a year earlier, official data showed, raising questions about the health of the world's second-largest economy despite officials blaming Lunar New Year holidays for the unexpected slide.

Imports rose 10.1 percent in February from a year earlier, producing a trade deficit of $23 billion for the month, the General Administration of Customs said on Saturday.

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That compared with market expectations in a Reuters poll of a rise of 6.8 percent in exports, an 8 percent rise in imports and a trade surplus of $14.5 billion.

Analysts cautioned against reading too much into single monthly figures for January or February, given possible distortions caused by the Lunar New Year holiday, which began on Jan. 31 and covered early February. Many plants and offices shut for extended periods during the festival.

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Putting January and February together, exports still fell 1.6 percent from a year earlier, versus a 7.9 percent full-year rise in 2013. Imports rose 10 percent year-on-year in the first two months, which compared to a 7.3 percent rise in 2013.

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"February export numbers were a surprise on the downside, and even combined January-February numbers were below market expectations," said Li Heng, an economist at Minsheng Securities in Beijing.

"The data shows that the economy faces relatively big downward pressures and macro-policies need to be loosened a bit."

The government may step up fiscal spending to support some investment projects if growth slows further, given there is limited room for the central bank to loosen policy, Li said.

China's trade outlook is widely expected to be rosier this year in line with a recovery in developed countries.

China is fully confident of achieving its 7.5 percent growth target in total trade this year, Commerce Minister Gao Hucheng said on Friday, citing an improving global economic environment.

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China's combined exports and imports grew 7.6 percent in 2013, just short of the official target of 8 percent. China's goods trade in 2013 hit $4.16 trillion, overtaking the United States for the first time to become the world's largest goods trading nation, Gao said on Friday.