China exports plunge on coronavirus epidemic

China exports plunge on coronavirus epidemic

March 7, 2020 0 By mykenyancareers
corona1 - China exports plunge on coronavirus epidemic
Exports fell 17.2 percent, the biggest drop since February 2019 during the trade war with the United States, and imports dropped 4 percent, according to official data released Saturday/FILE

BEIJING,
China, Mar 7 – China’s exports plummeted in the first two months of this year
on the back of a coronavirus epidemic that forced businesses to suspend
operations, disrupting the world’s supply chains.

Exports fell
17.2 percent, the biggest drop since February 2019 during the trade war with
the United States, and imports dropped 4 percent, according to official data
released Saturday.

A Bloomberg poll of economists had expected exports to drop less, by 16.2 percent, but had foreseen a much starker drop on imports of 16.1 percent.

Consumers
stayed home during the Lunar New Year break at the end of January and
businesses saw a much slower return to work, as the country struggled to
contain the spread of the deadly coronavirus, which has killed more than 3,000
people in China alone.

China’s
trade surplus with the US — a key point of contention in the trade dispute
between the two countries — sharply narrowed 40 percent in the first two
months, from $42 billion last year to $25.4 billion.

Chinese
authorities said last month that January and February’s data would be combined.

This is in
line with how some other indicators are released, to smooth over distortions
from the holiday break.

In an early
sign of the economic impact to come, China’s manufacturing activity fell to its
lowest level on record in February, with non-manufacturing activity plummeting
as well.

– Much
deeper impact –

Capital
Economics’ Julian Evans-Pritchard said in a report Friday that the decision to
combine the data in January and February means the “published growth rate
won’t fully reflect the extent of the recent weakness.” 

This is
because the disruption was mostly concentrated in February.

He added
that the recent downturn in trade has been “much deeper” than the
trade data is likely to suggest.

Coronavirus
cases were first reported last December in Wuhan, in China’s central Hubei
province, prompting a lockdown of the province, a key industrial region with
some 56 million people, in late January.

Travel restrictions
and quarantine measures are still in place.

The
disruptions call into question China’s ability to hold up its end of a partial
trade deal signed with the US in January, in which China committed to boost
purchases of US goods and services by $200 billion.

Chinese
authorities have stressed that the impact of the epidemic would be
“short-term.”

Beijing has
rolled out a host of support measures to help firms get back to business, even
as economists forecast a significant hit to overall growth.