China Jan-Feb trade likely contracted again as global economy slowed

FILE PHOTO: Customers walk past a store in a shopping area in Beijing, China February 3, 2023. REUTERS/Tingshu Wang

By Joe Cash

BEIJING (Reuters) -China likely again exported and imported less in January-February than a year earlier, backing policymakers’ fears that a slowing global economy could drag on growth at home, a Reuters poll showed on Monday.

Data for the period January-February are expected to show a 9.4% fall in exports from a year earlier, only slightly better than the 9.9% annual drop recorded in December, which was the worst performance since February 2020.

Actual trade data will be released on Tuesday.

Commerce Minister Wang Wentao warned on Friday that downward pressure on the country’s imports and exports would increase significantly this year as the risk of a global recession and, with it, weakening external demand was growing.

China has set a target for economic growth this year of around 5%, after the economy, the world’s second largest, grew at one of its slowest rates in decades in 2022. Gross domestic product was up only 3% on 2021.

January-February imports were likely 5.5% lower than a year earlier, according to the median forecast of 29 economists in the poll, improving on the 7.5% annual drop seen in December.

For many statistics, China reports combined data for January and February, because the lunar new year holiday moves between the two months.

In his outgoing work report at the opening of the annual session of its National People’s Congress, which is expected to run until March 13, Premier Li Keqiang stressed the need for economic stability and expanding consumption.

Domestic consumption and services have led China’s recovery so far this year.

The country’s state planner told a press conference in Beijing on Monday it was confident that China could achieve its 2023 growth target as consumption picked up steam. It echoed the Commerce Ministry’s concerns that the external environment posed serious challenges to exports.

Manufacturing activity in China in February expanded at its fastest pace in more than a decade, data from the National Bureau of Statistics showed on March 1, with new export orders rising for the first time since April 2021.

Factory activity readings from other Asian economies for February were more downbeat, however, reinforcing the view that conditions abroad were more sluggish.

(Polling by Madhumita Gokhale and Anant Chandak; Reporting by Joe Cash; Editing by Bradley Perrett)


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