China exports beat forecasts on strong US demand

A worker at a factory in China Demand from the US and South East Asia has driven a rise in exports

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Chinese exports rose more than expected in February, adding to optimism over a recovery in its economy.

Shipments jumped 21.8% from a year earlier, boosted by strong demand from the US and South East Asia. Most analysts had expected a 15% rise.

Exports, which are a key driver of China's growth, have been hurt recently by a slowdown in its key markets.

Analysts said the data may be skewed due to the Lunar New Year, but added that the trend was that of a recovery.

"Exports in January and February were both quite strong. This shows a recovering trend," said Sun Chi, an economist at Daiwa in Hong Kong.

Holiday season impact

Start Quote

You have to combine the data for January and February to see the real picture”

End Quote Dariusz Kowalczyk Credit Agricole CIB

However, there was a big fall in imports, which declined 15.2% from a year earlier.

Analysts said that the Lunar New Year celebrations, during which factories and businesses in China are shut for days, played a key role in that decline.

Last year, the Lunar New Year was celebrated in January, while this year it was observed in February.

This meant that factories operated for fewer days in February this year than in 2012.

"Since the factories worked for a [lower] number of days, they imported far less raw materials than they would normally have done," said Dariusz Kowalczyk, senior economist with Credit Agricole CIB in Hong Kong.

"That is why you have to combine the data for January and February to see the real picture."

Mr Kowalczyk said that the combined data for the two months indicated a jump of 5.1% in imports from a year earlier.

He added that the the jump in exports for February might also have been much stronger if the factories had worked the usual number of days.

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