3 min read.Updated: 08 Mar 2019, 12:17 PM ISTReuters
February exports fell 20.7% from a year earlier, the largest decline since February 2016
Imports fell 5.2% from a year earlier, widening from January's 1.5% drop, and leaving a trade surplus of $4.12 billion for the month
Beijing: China's exports tumbled the most in three years in February while imports fell for a third straight month, pointing to a further slowdown in the economy despite a spate of support measures.
While seasonal factors may have been at play, the shockingly weak readings from the world's largest trading nation added to worries about a global slowdown, a day after the European Central Bank slashed growth forecasts for the region.
Asian stock markets and US futures extended early losses after the data. Chinese stocks sank over 3%.
Global investors and China's major trading partners are closely watching Beijing's policy reactions as economic growth cools from last year's 28-year low.
February exports fell 20.7% from a year earlier, the largest decline since February 2016, customs data showed. Economists polled by Reuters had expected a 4.8 percent drop after January's unexpected 9.1% jump.
"Today's trade figures reinforce our view that China's trade recession has started to emerge," Raymond Yeung, Greater China chief economist at ANZ, wrote in a note.
"Chinese exports already registered negative growth in December. The strong figures in January were not reliable due to distortions from the Lunar New Year holiday period."
Imports fell 5.2% from a year earlier, worse than analysts' forecasts for a 1.4% fall and widening from January's 1.5% drop. Imports of major commodities fell across the board.
That left the country with a trade surplus of $4.12 billion for the month, much smaller than forecasts of $26.38 billion.
Analysts warn that data from China in the first two months of the year should be read with caution due to business disruptions caused by the long Lunar New Year holidays, which came in mid-February in 2018 but started on Feb. 4 this year.
But many China watchers had expected a weak start to the year as factory surveys showed dwindling domestic and export orders and the Sino-US trade war dragged on.
China's data on Friday showed its surplus with the United States narrowed to $14.72 billion in February from $27.3 billion in January, and it has promised to buy more U.S. goods such as agricultural products as part of the trade discussions.
US President Donald Trump said on Wednesday that trade talks were moving along well and predicted either a "good deal" or no deal between the world's two largest economies.
Trump postponed a sharp US tariff hike slated for early March as the talks progressed, but both Washington and Beijing have kept previous duties in place.
At the same time, global demand has been weakening, particularly in Europe. China's exports to all of its major markets fell across the board last month.
The Chinese government's top diplomat, State Councillor Wang Yi, said on Friday that trade talks had made substantive progress, and that the two countries' relations should not descend into confrontation.
China's economy was already slowing last year before trade tensions escalated, due in part to a regulatory clampdown on riskier lending that starved smaller, private companies of financing and stifled investment.
Actual growth last year slowed to 6.6%, and is expected to cool further to 6.2% this year. Many analysts expect a rocky first half before a flurry of stimulus measures start to stabilise activity around mid-year.
China's slowdown and the trade war are having an increasing impact on other trade-reliant countries and businesses worldwide.
Japan's exports in January fell the most in more than two years as China-bound shipments tumbled.
On Thursday, automotive chipmaker Renesas Electronics Corp said it plans to halt production at six plants in Japan for up to two months this year as it braces for a further slowdown in Chinese demand.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed
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