China’s unusual advance release of trade data in early March was a bid to spread “positive news that could help shore up confidence” after exports in February posted the steepest drop in three years, analysts said.
Exports in the first nine days of March surged 39.9 per cent, compared with the same period last year, according to detailed data released over the weekend by the General Administration of Customs.
It followed figures released on Friday that showed February exports tumbled 20.7 per cent compared to the same period last year, as the world’s second-largest economy suffers from an economic slowdown compounded by the effects of the US-China trade war.
“Positive news on exports could help shore up confidence a bit and thus stabilise the economy and help drive a moderate recovery,” said Allan von Mehren, China economist at Danske Bank. “I do think [the advance March data announcement] may be because of the overall concern over the economy and negative sentiment that is pervasive among households and companies.”
China Customs chief Ni Yuefeng told Xinhua that the nation’s exports had picked up in February after the Lunar New Year holiday, also known as the Spring Festival.
“From historical data, it’s normal for there to be fluctuations in data for the Spring Festival month. Looking at the export trend after the Spring Festival, we are full of confidence about the next stage of import-export growth,” Ni said.
In a similar vein, China’s commerce minister Zhong San said over the weekend that not only had the volume of exports risen, but the quality of goods being exported had also increased, as hi-tech products now accounted for 30 per cent of total exports.
China’s total trade – imports and exports – grew 24.7 per cent in the first nine days of March and 21.0 per cent in the second half of February compared with the same periods last year, according to government data.
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But some analysts warned that the partial March figures may not be the best gauge of longer term trade trends in the context of the US-China trade war.
I do think it may be because of the overall concern over the economy and negative sentiment that is pervasive among households and companies.
“I think it is too early to talk about a rebound but this is what it suggests,” said Alicia Garcia Herrero, chief Asia-Pacific economist at investment bank Natixis.
“It could also be a front-loading effect as actors are not sure whether the current [US-China] truce will continue depending on how the negotiations are closed.”
China International Capital Corporation analyst Eva Yi attributed the pickup in export growth to the “Lunar New Year effect”.
“Chinese [Lunar] New Year (CNY) fell on February 16 in 2018, and since workers typically start to return to the city after the 15th day of the CNY, the late CNY dampened export activities in the first week of March 2018,” she said.
“Therefore, it is not surprising for the customs to observe a jump in exports growth in the first 8 days of March 2019 [since the holiday did not impact March this year]” The Lunar New Year holiday started on February 5 this year, meaning the 15th day fell on February 20.
In February, China imported 19.9 per cent less from the United States, falling US$7.9 billion from the level of US$9.2 billion in January.
It also exported 14.1 per cent fewer goods to the US, suggesting that trade between the world’s two biggest economies is beginning to slow.
China’s trade data had been better than expected in January, largely due to front-loading of exports before the Lunar New Year Holiday, which started 10 days earlier this year than last year.
The February data showed the biggest decline in China’s exports since February 2016.