China's exports, imports slump in January, record trade surplus

China's exports fell 3.3 percent in January from a year earlier, while imports slumped by 19.9 percent, both missing expectations by a wide margin, and resulting in a record monthly trade surplus of $60 billion.
Thinking that easing measures in Europe would boost demand for Chinese goods, analysts polled by Reuters had expected to exports to rise by 6.3 percent, and imports to fall by only 3 percent, to give a trade deficit of $48.9 billion.
Instead, exports slid 12 percent on a monthly basis, while imports dove 21.1 percent, according to the data released by the Customs Administration said on Sunday.
The decline was led by a sharp slide in commodities imports, in particular imports of coal which dropped nearly 40 percent to 16.78 million tonnes, down from December's 27.22 million tonnes, as well as a scale back in crude oil imports, which slid 7.9 percent.
While the trade data augured badly for an economy that suffered its slowest economic growth in 24 years in 2014, analysts say strong seasonal distortions due to the Lunar New Year holiday make it difficult to interpret the data. Last year the holiday fell in January, and this year it falls in February.
China's export numbers tend to be erratic, sharp moves in opposite directions are common and the combined January and February figures are often a more accurate gauge of the overall trend, analysts say.
Officials have said that while they expect Chinese exports to improve, the sector would continue to face headwinds in 2015.
The government is expected to lower its GDP target to around 7 percent this year, after posting 7.4 percent in 2014.
Policymakers have responded to the weakness by cutting interest rates and, on Wednesday, cutting the amount of reserves banks must hold back when lending, but the measures were largely seen as holding the line, with most economists calling for more easing in the pipeline to reinvigorate growth.
China's yuan fell 2.5 percent in 2014 and has lost another 0.6 percent so far in 2015, providing some relief to exporters after four years of uninterrupted appreciation.
During 2014, China's total trade value increased by 3.4 percent from a year earlier, short of the official target of 7.5 percent, and some analysts have raised questions about whether export data was inflated by fake invoicing as firms speculated in the currency and commodities markets.