China’s trade deficit hits record in February 201210 March, 2012, 15:25. Posted by Zarathustra
Tags: Economy, Trade
The General Administration of Custom of China published the latest set of trade figures, which show that the country records the biggest trade deficits in many years.
Trade deficit amounted to US$31.483 billion, highest since 1989 according to Bloomberg. Exports amounted to US$114.471 billion, an increase of 18.4% compared to last year, well below market expectation of 31.1%, while Imports grew strongly by 39.6% from last year to US$145.954 billion, above market expectation of 31.8% yoy growth. Year-to-date trade balance is now in deficit territory after recording a respectable surplus in January, with YTD deficit amount to US$4.42 billion.
On a seasonally adjusted basis, exports increased by 4% yoy, while Imports increased by 9.4% yoy. On a month-on-month basis, exports decreased by 23.6%, while imports increased by 19.0%.
Source: General Administration of Customs
As one can see, the trade balance for most recent first quarters have distorted to the downside partly due to the Chinese New Year. Similar to last year when China record a quarterly trade deficit of US$700 million in first quarter, I believe this will likely happen again this year.
The weaker-than-expected exports could reflect the underlying weakness of the global economy, particularly in Europe. The good news from this report, however, is that imports have grown rather strongly, although most seems to be attributable to the timing of Chinese New Year holiday, which happened in January this year, but in February last year. We will need to see the data from the coming months to have a clear sense of what’s happening, free from the Chinese New Year distortion.