BEIJING (REUTERS) - China’s export growth slowed in the January-February period due to the week-long Chinese New Year holiday, and though the data beat expectations, Russia’s invasion of Ukraine has heightened uncertainty over the outlook for global trade this year.
Outbound shipments rose 16.3 per cent in the first two months of the year from the same period a year earlier, official data showed on Monday (March 7), beating analyst expectations for a 15 per cent rise, but down from 20.9 per cent gain in December.
Imports increased 15.5 per cent, easing from a 19.5 per cent gain in December and below the forecast 16.5 per cent increase.
The Customs agency publishes combined January and February trade data to smooth distortions caused by the Chinese New Year, which can fall in either month.
Factory activity normally slows considerably during the long holiday as workers return to their home towns. But for the third year in a row, many factory workers did not return home because of concerns about Covid-19, which kept some factories operating.
China’s booming exports outperformed expectations for much of last year and buoyed growth in the world’s second-largest economy, but analysts expect shipments to slow eventually as overseas demand for goods eases and high costs pressure exporters.
Beijing has targeted slower economic growth of around 5.5 per cent this year amid an uncertain global recovery and a downturn in the country’s vast property sector. While that would mark a sharp slowdown in annual growth, it is nonetheless an ambitious target that would require more policy support, analysts say.
“With the Ukraine crisis imposing downside risk to global demand, China will have to rely more on domestic demand in 2022,” said Mr Zhang Zhiwei, chief economist at Pinpoint Asset Management. “Now the pressure is on the fiscal policy to deliver.”
Russia’s invasion of Ukraine late last month and mounting international sanctions on Moscow have raised fresh risks for the global economy, adding to months-long strains for China’s factories from worldwide supply chain snags.
Chinese exporters with exposure to Ukrainian markets have delayed shipments, while some factories with business in Russia have been waiting for payments from their clients before arranging the next shipments, factory officials and analysts told Reuters.
Former vice-director of the Beijing Economic Operation Association Tian Yun expects China-Europe trade may be disrupted due to the conflict in Ukraine if the "crisis halts China-EU freight train services or lead to a slower operation efficiency".
China posted a trade surplus of US$115.95 billion (S$157.7 billion) in the same period, above the forecast US$99.50 billion surplus and December’s US$94.46 billion surplus.
