China Posts First Monthly Trade Gap In 3 Years

China unexpectedly reported a USD 9.15 billion trade deficit in February of 2017, compared to a USD 28.2 billion surplus a year earlier and missing market expectations of a USD 25.75 billion surplus. It was the first monthly trade gap since February 2014, as imports surged while exports fell.
Rida Husna | 3/8/2017 2:58:56 PM
In February, exports declined by 1.3 percent year-on-year to USD 120.08 billion, following a 7.9 percent rise in January while markets expected a 12.3 percent growth.

Imports jumped 38.1 percent to USD 129.23 billion, after growing 16.7 percent in the prior month and way above consensus of a 20.3 percent rise. It was the fastest increase since early 2012, driven by strong demand for commodities from iron ore to crude oil and coal.

In yuan-denominated terms, exports went up 4.2 percent from a year earlier in February, compared to a 15.9 percent rise in a month earlier. Inbound shipments soared 44.7 percent, following a 25.2 percent rise in January.

In January 2017, China posted a trade surplus of USD 51.35 billlion.

Trade in January and February can be distorted by the week-long Lunar New Year holidays, with business slowing down weeks ahead of time and companies scaling back operations. This year, the holiday fell on January 28th.

Considering the first two months of 2017, total trade in USD went up 13.3 percent from a year earlier. Exports rose 4 percent, boosted by higher shipments of electronics (6.7 percent), high-tech products (9.1 percent), handheld radiotelephones and parts (15.4 percent) and automatica data processing equipment and components (6.5 percent). In contrast, sales fell for clothing and accessories (-10.5 percent) and textile yarn, fabric and products (-7 percent). Exports were higher to Hong Kong (1.5 percent), India (5.3 percent), Japan (2.4 percent), South Korea (16.3 percent), Taiwan (13.1 percent), ASEAN countries (7.5 percent), the EU countries (1.9 percent), South Africa (10.7 percent), Brazil (31.3 percent), Russia (15.5 percent), the US (4.4 percent), Australia (1.7 percent) and New Zealand (2.3 percent). 

Imports jumped 26.4 percent, mainly due to higher purchases of electronics (15.1 percent), high-tech products (16.5 percent), integrated circuits (17.9 percent), crude (70.1 percent), agricultural products (24.3 percent) and iron ore and concentrates (94.6 percent). The European Union was the main import partner (imports rose 19.4 percent), followed by the ASEAN countries (imports up 29.5 percent), South Korea (15.7 percent), the US (32.8 percent), Japan (24.7 percent), Taiwan (21.5 percent) and Australia (77.6 percent). 

China Posts First Monthly Trade Gap In 3 Years