China February trade down as Spring Festival disrupts business

China's foreign trade fell in February partly due to business disruptions caused by the week-long Lunar New Year holiday, customs data showed Friday.

Foreign trade of goods fell 9.4 percent year on year last month to 1.81 trillion yuan (US$270 billion), the General Administration of Customs said.

Exports dipped 16.6 percent year on year to 922.76 billion yuan last month, while imports decreased 0.3 percent to 888.3 billion yuan.

Although Friday's trade figures raised concerns about a further slowdown in the world's second-largest economy, analysts cautioned it was difficult to compare trends in China's data at the start of the year due to the Spring Festival holiday, which came in early February this year and could affect business activity.

Deducting the Spring Festival factor, China's foreign trade rose 10.2 percent year on year in February, with exports increasing 7.8 percent and imports rising 12.9 percent, respectively.

Liu Yaxin, an analyst at the China Merchants Securities, said the country's foreign trade growth would pick up after reaching a low point during the first two months.

During the Jan-Feb period, China's foreign trade amounted to 4.54 trillion yuan, up 0.7 percent year on year. Exports added 0.1 percent to reach 2.42 trillion yuan, while imports rose 1.5 percent to 2.12 trillion yuan. The trade surplus stood at 308.68 billion yuan, down 8.7 percent from one year earlier.

"China's trade surplus is likely to continue to narrow this year due to sluggish external demand and stronger domestic demand," Huatai Securities said in a research note.

"China's exports growth is very likely to fall in 2019 from last year, due to the unpromising global trade environment," said Li Chao, chief analyst for Huatai Securities.

During the Jan-Feb period, China's trade with the European Union, ASEAN countries, and Japan increased 8.9 percent, 1.9 percent and 4 percent, respectively, while trade with countries along the Belt and Road registered faster-than-average growth, with the combined trade volume standing at 1.28 trillion yuan, up 2.4 percent year on year.

Private enterprises played a bigger role in the first two months, accounting for 40.6 percent of the total foreign trade, up 1.4 percentage points year on year.

The government is targeting economic growth of 6 to 6.5 percent in 2019, Premier Li Keqiang said at Tuesday's opening of the annual legislative session, a lower target than set for 2018.

China will promote stable and higher quality growth of foreign trade this year, said Li while pledging to diversify export markets and actively expand imports.

China has vowed to cut taxes on a larger scale this year, which is expected to boost domestic demand and stabilize growth.

Exports to the United States fell 9.9 percent, while imports tumbled 32.2 percent during the two-month period, the data showed.

Chinese Foreign Minister Wang Yi noted Friday that the two sides had made "significant progress" recently and blasted hawks in Washington who have advocated a "decoupling" between the two countries' economies.

"We still have a positive outlook on China-US relations. The two countries will not, and should not descend into confrontation," Wang said.