Eur‘woes’ hit China exporters

China last month had its largest trade deficit since at least 1989 as Europe’s sovereign-debt turmoil dampened exports, and imports rebounded after a weeklong holiday.

The shortfall was $31.5 billion, the customs bureau said yesterday.

Imports rose 39.6 percent from a year earlier, after a 15.3 percent slump in January, while exports increased 18.4 percent, the bureau said.

Data in the first two months are distorted by the timing of the Lunar New Year holiday, which fell in January this year and February in 2011.

The data, along with lowerthan-forecast inflation, industrial output and retail sales reported March 9, raise the odds Premier Wen Jiabao will ease policies to support growth in the world’s second-biggest economy.

Commerce Minister Chen Deming’s warning last week that boosting trade by 10 percent this year will require “arduous efforts” may also signal a slower pace of yuan gains as policy makers seek to aid exporters.

“Easing inflation and weakening economic activity send a strong signal for further loosening in the upcoming months,” said Shen Jianguang, Hong Kong-based chief greater China economist for Mizuho Securities Asia Ltd.

China has allowed its currency to weaken against the dollar this year, aiding exporters, as Europe’s debt crisis clouds the outlook for overseas sales. Bloomberg