BEIJING, March 8 - China unexpectedly posted a rare trade
deficit in February as imports surged far more than expected to
feed a months-long construction boom, driven by commodities from
iron ore and copper to crude oil and coal.
Imports in yuan-denominated terms surged 44.7 percent from a
year earlier, while exports rose 4.2 percent, official data
showed on Wednesday.
That left the country with a trade deficit of 60.63 billion
yuan ($8.79 billion) for the month, the General Administration
of Customs said.
Customs has not yet published dollar-denominated trade
figures, on which most economists and investors base their
forecasts and analysis.
Apart from currency fluctuations, higher commodity prices
and the timing of the long Lunar New year holidays early in the
year also may have distorted the data. Most of China's commodity
imports grew strongly in volume terms from a year earlier, but
dipped from January.
Still, economists say the upbeat readings reinforced a
growing view that economic activity in China and globally picked
up in the first two months of the year.
That could give China's policymakers more confidence to
press ahead with oft-delayed and painful structural reforms such
as tackling a mountain of debt.
Containing the risks from years of debt-fuelled stimulus and
heavy spending has been a major focus at the annual meeting of
China's parliament which began on Sunday.
China's first-quarter economic growth could accelerate to 7
percent year-on-year, from 6.8 percent in the last quarter,
economists at OCBC wrote in a note on Monday, while adding that
the pace may ease starting in spring.
"We suspect that this largely reflects the boost to import
values from the recent jump in commodity price inflation, but it
also suggests that domestic demand remains resilient," Julian
Evans-Pritchard at Capital Economics said in a note.
"Looking ahead, we expect external demand to remain fairly
strong during the coming quarters which should continue to
But he added that it was unlikely the current pace of import
growth can be sustained as the impact of higher commodity prices
will start to drop out of the calculations in coming months.
Analysts polled by Reuters had expected February shipments
from the world's largest exporter to have risen 12.3 percent in
dollar-terms, an improvement from a 7.9 percent rise in January.
Imports had been expected to rise 20 percent, after rising
16.7 percent in January. Both export and import growth were seen
at multi-year highs.
Analysts were expecting China's trade surplus to have risen
to $25.75 billion in February, versus January's $51.35 billion,
with growing attention on its large trade surplus with the
United States as new U.S. President Donald Trump ramps up his
China has not posted a trade deficit in dollar terms since
China has trimmed its economic growth target to around 6.5
percent this year, Premier Li Keqiang said in his work report at
the opening of parliament on Sunday. The economy grew 6.7
percent last year, the slowest pace in 26 years.
As in 2016, China did not set a target for exports in 2017,
underlining the uncertain global outlook, but Li said China will
take steps to steady exports this year.
China's shipments to the United States rose 11.5 percent in
February in yuan terms, compared to a year earlier. It imports
from the U.S. rose 41.0 percent.
The yuan has lost about 5 percent of its value against the
dollar since early 2016.
In the early days of his presidency Trump hasn't made good
yet on his campaign pledges of greater protectionist measures,
but analysts say the spectre of deteriorating U.S.-China trade
and political ties is likely to weigh on confidence of exporters
and investors worldwide.
The U.S. International Trade Commission said last Friday it
had made a final finding that the U.S. industry was being harmed
by the dumping and subsidization of imports of carbon and alloy
steel cut-to-length plate from China.
A government adviser said last month that China's exports
would likely return to growth this year, as commodity prices
stabilise and the impact of the appreciation in the U.S. dollar
is gradually absorbed.
($1 = 6.9010 Chinese yuan renminbi)
(Reporting by Cheng Fang; Editing by Kim Coghill)