China’s trade surplus widened more than expected in January even as exports dipped and imports slid, but economists said the data was distorted by the Lunar New Year holidays.
China’s exports fell for the first time in more than two years in January as trade was disrupted by the weeklong Chinese New Year holiday. Overseas demand was also hit last month in part on account of Europe’s prolonged debt crisis.
China's exports declined 0.5% from a year earlier, the customs bureau said today. Imports dropped by a more-than-forecast 15.3%, it added.
China’s trade surplus totaled US$27.3bn in January, its biggest in six months. Economists had expected trade surplus of US$10.6bn.
China's January imports were the lowest since August 2009 while the drop in exports was the worst showing since November 2009.
China's trade data in the first two months of the year are distorted by the timing of the annual Lunar New Year holidays. The week-long festival fell in January this year as against February last year.
There were 22 working days in January 2011 and 17 working days in 2012.
"We should not read too much into the single month data, which is usually volatile," Sun Junwei, economist at HSBC Global Research in Beijing, was quoted as saying.
If one is to adjust for the annual holidays, export growth was a positive 28.7% year-on-year in January and import growth was at a positive 10% year-on-year, Bank of America/Merrill Lynch said in a note.
In a separate statement, China's State Administration of Foreign Exchange (SAFE) - guardian of the country's US$3 trillion reserves - said that the country's current account surplus would fall sharply in 2012.
"China is expected to maintain an international payments surplus in 2012, but the surplus will fall significantly with greater volatility," it said in a statement on Thursday.
SAFE said that though that the surplus would remain despite the risk of external shocks to demand and capital flows. "China's current account, including cargo trade, will continue to report surplus," SAFE said.