Courtesy of Mish.
Chalk up another unexpected data point for the slowing global economy: Economists expected Chinese exports to grow 5.9% in January. Instead exports declined by 3.3%. Imports declined a whopping -19.9% vs. an expectation of a 3.2% decline.
With imports down way more than exports, China Posted a Record Trade Surplus of $60 billion, in this case, not a sign of strength.
Year-Over-Year Data Points
- Imports plunged 19.9% year-over-year vs. economist expectations of a 3.2% drop.
- Exports fell 3.3% vs. economist expectations of 5.9% gain.
- Crude oil imports fell 41.8%
- Iron ore imports fell 50.3%
- Coal imports fell 61.8%
- Exports to the European Union fell 4.4%
- Exports to the Hong Kong fell 10.9%
- Exports to the Japan fell 20.4%
- Exports to the Russia fell 20.4%
Imports declined from all major trade partners, including the European Union and the U.S.
Lunar New Year Holiday Affects Numbers
Trade numbers from China fluctuate widely in January and February depending on when a week-long new year lunar holiday begins. In 2015, the holiday begins in February making January numbers all the more alarming.
Very Strange Data
Reuters explains the lunar-cycle in China’s imports slump, capping dismal January trade performance.
Chinese economic indicators in January and February are typically viewed with caution given the distortions caused by the shifting week-long Lunar New Year holiday, and while the analyst median estimate was for a rise, the range of estimates was extremely wide.
However the data – in particular the import data – is worrisome even after accounting for cyclical factors; last year the new year holiday idled factories and financial markets for a week in January, but this year the holiday comes in late February and January was a full month of business as usual.
“It’s a very strange data print,” said Andrew Polk, economist at the Conference Board in Beijing, noting that exports tended to be less effected by the holiday than other indicators, but added he was more concerned by the implications of the startlingly negative import figure.
Chinese officials had predicted that monetary easing measures in Europe would boost demand for Chinese goods, and analysts polled by Reuters had also been optimistic that signs of economic strengthening in the United States would support exports….
