China’s exports contracted sharply last month, deepening worries over slowing growth in the world’s second-largest economy.
February exports shrank 20.6% from a year earlier to 821.8 billion yuan ($126 billion), according to data from China’s General Administration of Customs. That’s a steeper drop than the 6.6% contraction the previous month.
China’s economy is now registering its slowest pace of growth in 25 years after decades of breakneck expansion. Investors are worried about the scale of the slowdown, which has set off waves of volatile trading in stocks, commodities and currencies in recent months.
Disappointing economic data so far this year haven’t done much to shore up confidence in Beijing’s ability to engineer a smooth transition to an era of slower growth. Chinese imports fell 8% to 612.3 billion yuan ($94 billion) in February after a 14.4% plunge in January.
But some economists say it’s too soon to sound the alarm about the February numbers.
“We suspect that the drop in export growth largely reflects seasonal distortions due to annual shifts in the timing of Chinese New Year,” said Julian Evans-Pritchard of Capital Economics.
The Lunar New Year is the country’s biggest annual holiday, a time when businesses shut down as workers return home to celebrate with family and friends.
Last year, it fell unusually late in February, which meant that the majority of the pre-holiday rush to finish orders occurred that month, pushing export figures up. That makes it a tough comparison for this February, when the holiday was much earlier in the month, and trade activity slowed.
While Evans-Pritchard expects the trade flow to rebound next month, other experts were less optimistic.
Analysts at the Japanese bank Nomura said that even taking the seasonal variations into account, the trade numbers were worse than expected and suggested weakening momentum.
The benchmark Shanghai Composite was down about 1.2% in early afternoon trading Tuesday, while stocks in Hong Kong lost around 0.6%.