China Exports Plunge At Fastest Pace In 3 Years

China's exports dropped the most in three years in February, eclipsing economists expectations, mainly due to the tariffs-driven sharp fall in trade with the US and also because of a shift in the timing of the Chinese New Year.

Exports tumbled 20.7 percent year-on-year, which was the biggest fall since February 2016, official customs data showed Friday.

The fall was much bigger than the 4.8 percent slump economists had expected. In January, exports grew 9.1 percent.

This year, the Lunar New Year was earlier in February than in the previous year, when it began in the middle of the month. Hence, January trade figures were better due to front-loading of order ahead of the new year holidays.

However, exports fell nearly 5 percent even in the January-February period that removes the distortions caused by the timing of the new year. Imports dropped around 3 percent in the two-month period.

Imports decreased 5.2 percent year-on-year, which was worse than the 1.4 percent declined economists had predicted. January saw a 1.5 percent fall in imports.

The visible trade surplus shrunk to $4.12 billion from $39.16 billion in January. Economists were looking for an excess of 26.38 billion.

The trade surplus with the US nearly halved to $14.72 billion from $27.3 billion in January.

Exports to the US shrunk 14.6 percent in the January-February period.

The US goods trade deficit hit a decade-high of $621 billion in 2018 with the country's trade deficit with China widening to a record $419.2 billion.

The weaker trade data is set to put pressure on the US and Chinese negotiators to cool trade tensions that is hurting the global economy. Talks are set to conclude later this month, the CNBC reported.

"Tariffs are weighing on shipments to the US," Capital Economics economist Julian Evans-Pritchard said.

"But broader weakness in global demand means that, even if Trump and Xi finalize a trade deal soon, the outlook for exports remains gloomy."

Chinese Premier Li Keqiang announced on Tuesday that the government would target growth of 6-6.5 percent this year. The economy expanded 6.6 percent in 2018, the weakest pace in 28 years.