China records $39B trade surplus in Jan

beijing — China’s exports unexpectedly returned to growth in January after a shock decline the previous month, while imports fell much less than expected, but analysts said the strength was likely due to seasonal factors and predicted renewed trade weakness ahead.

Investors and policymakers are closely watching to see how quickly activity in China is cooling, or if support measures announced last year are starting to take hold, which could lift some of the gloom hanging over the global economy.

January exports rose 9.1 per cent from a year earlier, customs data showed, defying economists’ expectations for a 3.2 per cent drop and a marked turnaround from December’s 4.4 per cent decline.

Imports fell 1.5 per cent, much better than forecasts for a 10 per cent slide and narrowing from December’s 7.6 per cent drop. That left the country with a trade surplus of $39.16 billion for the month.

“Clearly, the numbers surprised the market on the upside. But given the deceleration of global (factory readings) and weak Korean trade data, it might be pre-mature to conclude that the trade prospect has improved based on the January number alone,” said Tommy Xie, China economist at OCBC Bank in Singapore.

Analysts warned that data from China early in the year must be treated with caution due to business distortions caused by the long Lunar New Year holidays, which started on February 4 this year.—