Affected by the Spring Festival factor and trade uncertainty, China’s import and export growth rate in February fell short of expectations.
On Friday, March 8, the China Customs Administration released data showing that in February, China’s imports in February fell 5.2% year-on-year, the market is expected to decline by 0.9%, the previous value fell by 1.5%; February exports fell by 20.7% year-on-year. The largest since February 2016, a sharply lower than expected 4% decline, the previous value of 9.1%.
Huatai’s macro Li Chao team said that there were two main reasons for the decline in export data in February. First, considering the uncertainty of China and the United States in March before the Spring Festival, some enterprises rushed to export twice. Second, most enterprises concentrated on the first month. After the start of construction on the 15th (February 19th), the production time was limited, so the data of this month showed a large decline compared with the same period of last year.
However, with the implementation of the newly revised Individual Income Tax Law in 2019, approximately 80 million taxpayers who meet the tax reduction policy should enjoy the benefits, thereby promoting consumption and expanding domestic demand.
The Li Chao team therefore believes that under the guidance of the policy of reducing taxes and reducing expenses and expanding domestic demand, after the February Lunar New Year, companies will start to purchase raw materials, and the future will increase the resilience of import growth to a certain extent.
Dr. Deng Haiqing, chief economist at Wall Street, pointed out that on the whole, the main thread of import and export logic that the market thinks in 2018 is to be established before the tariff increase. This should lead to the high level of import and export in the second and third quarters of 2018. The main reason, after the situation eased, and the end of the run, the import and export began to make up, this process may not be over.
Taking into account the downward pressure on the overseas economy, Dr. Deng Haiqing believes that January has confirmed that it is not the turning point of import and export. When the import and export stabilized in 2019, it still needs to be observed carefully.
In February, China’s total import and export value was US$266.36 billion, down 13.8%. Among them, exports were 135.24 billion US dollars, down 20.7%; imports were 131.12 billion US dollars, down 5.2%; trade surplus was 4.12 billion US dollars, narrowing 87.2%. Excluding the Spring Festival factor, China’s imports, exports, exports and imports increased by 3.9%, 1.5% and 6.5% in February, respectively.
In terms of RMB, China’s February import growth rate was -0.3%, 6% expected, and the previous value was 2.9%. China’s February exports were -16.6%, expected 7.1%, and the previous value was 13.9%.
In February, China’s total import and export value was 1.81 trillion RMB, down 9.4%. Among them, exports were 922.76 billion RMB, down 16.6%; imports were 888.3 billion RMB, down 0.3%; trade surplus was 34.46 billion RMB, narrowing 84%. Excluding the Spring Festival factor, China’s imports, exports, exports and imports increased by 10.2%, 7.8% and 12.9% respectively in February.
After the release of China’s import and export data, the offshore RMB fell by 60 points against the US dollar to 6.7340. Onshore, the RMB fell 50 points against the US dollar to 6.7229.