China Posts Trade Deficit in February, for First time in Three Years

China unexpectedly reported its first monthly trade deficit in three years as imports surged more than expected in February. Imports jumped 38.1 percent in February, while exports fell 1.3 percent from a year earlier. Analysts polled by Reuters had project a 12.3 percent rise in exports and a 20 percent increase in imports.

This come after President-elect Donald Trump pledges to implement protectionist trade policy and impose heavy tariffs on imports into the U.S. “We suspect that this largely reflects the boost to import values from the recent jump in commodity price inflation, but it also suggests that domestic demand remains resilient,” Julian Evans-Pritchard at Capital Economics said in a note, CNBC reports.

The surprise trade deficit is caused by the long Lunar New Year public holidays, which began 11 days earlier than last year. The holiday had significant impact with the output as many factories and business closed operation at that time.

“All deficits since 2005 have been in either the Lunar New Year month or in one of the months around the Lunar New Year month,” ING’s Chief Asia Economist Tim Condon wrote in a note.

Leave a Comment