Beijing, March 11: China's exports tumbled in February as the world's third-largest economy felt the full force of the global financial crisis, but capital spending accelerated in response to a massive government stimulus package.
With the world experiencing its deepest recession in decades, pessimists said the slump in exports was unlikely to end soon. Some said China could even record a trade deficit before long.
But optimists saw fresh hope in the more forward-looking investment data that China might pull out of its swoon faster than other major economies, thanks to the government's pump-priming and galloping credit growth.
"China has finally and spectacularly succumbed to the world financial crisis on the export side, and it's difficult to see why that would improve in the short term," said Paul Cavey, an economist at Macquarie Securities in Hong Kong.
Exports in February slid 25.7 percent from a year earlier, dwarfing forecasts of a 5.0 percent fall, while imports dropped 24.1 percent, close to projections of a 25.0 percent decline.
The resulting trade surplus was just $4.84 billion, a three-year low, compared with $39.1 billion in January and a record $40.1 billion in November, the customs administration said. Markets had expected a figure of $27.3 billion.
Shanghai shares fell 0.91 percent in reaction to the trade data, bucking a regional rally, while the dollar recouped early losses and rose across the board.
China's exports tumbled in February as the world's third-largest economy felt the full force of the global financial crisis, but capital spending accelerated in response to a massive government stimulus package.
With the world experiencing its deepest recession in decades, pessimists said the slump in exports was unlikely to end soon. Some said China could even record a trade deficit before long.
But optimists saw fresh hope in the more forward-looking investment data that China might pull out of its swoon faster than other major economies, thanks to the government's pump-priming and galloping credit growth.
"China has finally and spectacularly succumbed to the world financial crisis on the export side, and it's difficult to see why that would improve in the short term," said Paul Cavey, an economist at Macquarie Securities in Hong Kong.
Exports in February slid 25.7 percent from a year earlier, dwarfing forecasts of a 5.0 percent fall, while imports dropped 24.1 percent, close to projections of a 25.0 percent decline.
The resulting trade surplus was just $4.84 billion, a three-year low, compared with $39.1 billion in January and a record $40.1 billion in November, the customs administration said. Markets had expected a figure of $27.3 billion.
Shanghai shares fell 0.91 percent in reaction to the trade data, bucking a regional rally, while the dollar recouped early losses and rose across the board.
Bureau Report
First Published: Wednesday, March 11, 2009, 00:00