Imports jumped 44.7 percent while exports rose 4.2 percent in February in yuan terms, the customs administration said Wednesday. That left a trade deficit of 60.4 billion yuan ($8.8 billion), the first negative reading in three years, Bloomberg reported.
Economists said the results were skewed because the week-long Lunar New Year holidays that shutter factories and ports across the nation occurred in February 2016 versus late January in 2017, distorting base year comparisons.
"Imports surged as economic activity is on the recovery and on the increase in commodity prices," said Wen Bin, a researcher at China Minsheng Banking Corp. in Beijing. "Exports missed estimates mostly because trade is generally very volatile in the first two months due to the Chinese New Year factor," he said, adding that data for the first two months show that the external sector this year is better than last year.
China should be cautious about "fake imports," Li Daokui, a professor at Beijing’s Tsinghua University and former adviser to the People’s Bank of China, said in an interview last week on the sidelines of the NPC. Some capital outflows are disguised as trade, he said.
China set a 2017 growth target of "around 6.5 percent, or higher if possible" in the work report Premier Li Keqiang delivered Sunday at the National People’s Congress, versus last year’s 6.5 percent to 7 percent range. China will "ensure that foreign trade continues to pick up and register steady growth," the report said.
The world’s largest exporter faces more challenges and uncertainties this year. President Donald Trump has accused China of unfair trade practices and is now in a position to carry out threats, with Commerce Secretary Wilbur Ross sworn in. Measures will be announced “as soon as we have a proper case,” Ross said last week.
China’s trade surplus with the U.S. narrowed 3.5 percent to 220.3 billion yuan in the first two months of the year, customs said. Shipments to the U.S. in the period rose 11.5 percent to 383.8 billion yuan, while imports rose 41 percent to 163.5 billion yuan.