The Chinese imports declined by 15.2 per cent year-over-year in February after rising 28.8 per cent in January due to the country’s Lunar New Year holiday season that slowed down factory activity.
On the other side, exports grew by 21.8 per cent year-over-year in February, compared to a fall of 25 per cent in January.
The Chinese government already warned the outlook for exports was grim while presenting its plans for 2013 earlier this week.
The decline of imports may not be a major concern for China, as the country’s economy has steadily become less reliant on exports.
In the first two months of 2013, exports were up 23.6 per cent and imports were up 5 per cent compared to the same period last year.
Song Yu, an economist with Goldman Sachs, told the Financial Times (FT): “This can mean even the January and February combined data are distorted on the upside and the unwinding of the Chinese New Year distortions would happen in March.”
Meanwhile, the Chinese central bank started to withdraw excess cash from the economy due to the record inflow of foreign capital to the country in January.
Chinese Lunar New Year celebrations fell in the second week of February.