Beijing (Reuters) – China's exports unexpectedly returned to growth in January following a shock-hit in the previous month, while imports fell far less than expected. However, analysts said that this is likely to be seasonal and a renewed trade weakness is predicted.
Global investors and China's most important trading partners are watching to see how quickly the economy is cooling down, or whether a series of support measures announced last year are picking up and lifting some of the gloomy global economy.
January exports rose 9.1% yoy, with customs data showing Thursday. Economists surveyed by Reuters had expected a decline of 3.2 percent, down from 4.4 percent in December.
Imports fell 1.5 percent year-over-year, far better than analyst forecasts for a 10 percent decline and a 7.6 percent decline in December.
The country had a trade surplus of $ 39.16 billion for the month, better than the $ 33.5 billion forecast
Analysts warn that data from China should be treated with caution in the first two months of the year, as business distortions occurred as a result of the Lunar Moon's long New Year holidays, which fell in mid-February 2018 and started on February 4 of that year ,
"Obviously, the numbers took the market by surprise, but with the weakening of the global PMI and weak Korean trade data, it may be premature to conclude that the trading outlook has improved on January alone," said Tommy Xie, China CEO. Economist at OCBC Bank in Singapore.
"I suspect that the recovery is partly due to the Chinese New Year's effect, as this year's CNY is slightly earlier than in the previous year."
Economists generally felt that China would see lower exports earlier this year. Factories report overseas orders have been declining for months, and American warehouses are packed with racks of Chinese goods, which retailers stockpiled in anticipation of further US tariffs last year.
Global trade also fluctuated in the face of increasing protectionism and the downturn in some major economies, especially in Europe.
The pressure on China will quickly escalate if Beijing and Washington are unable to end their long-standing trade war soon. The US will dramatically increase tariffs on $ 200 billion in Chinese imports from March 1, even though this week President Donald Trump said he could "postpone" the deadline if an agreement comes close.
China's trade surplus with the United States declined to $ 27.3 billion in January from $ 29.87 billion in December, according to data released Thursday.
Exports to the US fell 2.4 percent year-on-year in January, while imports from the United States fell 41.2 percent.
In fact, China's net exports even weighed on growth of 8.6 percent last year, even after the unexpected increase in sales in the US. Reuters calculations are based on official data.
Factory issues are also showing weaker domestic orders, and more general economic weakness is placing a strain on business and consumer confidence. During the New Year holidays to Lunar retail sales increased by 8.5 percent compared to the previous year. This is still solid, but the lowest pace since at least 2011.
China's economic growth slowed to 6.6 percent in 2018, hampered by rising borrowing costs and curbing riskier lending, which hindered smaller private companies in capital and hindered investment.