No details up yet on my cheapie version of Bloomberg, will update when more is in.
Recall, however, that many analysts foresaw a fall in China’s surplus. It had stayed at near record levels despite falling volumes of trade overall because imports fell faster than exports.
Well, many imports are used to produce exports. As forward orders decline, manufacturers would buy less in the way of inputs, while still in the process of completing existing orders.
Update 12:10 AM: OK, sports fans, we now have more meat. Note in particular how the decline was way above consensus forecasts. The fall in the surplus plus dollar strength (ie little/no need to intervene to keep the RMB from rising) also says China will have much less reason to buy dollar assets like Treasuries
China’s trade surplus plunged in February as exports fell by a record, adding pressure on the government to spur domestic consumption to prop up the world’s third-biggest economy.The trade gap narrowed to $4.8 billion, about an eighth of the amount in the previous month, the customs bureau said in a statement. Exports tumbled 25.7 percent from a year earlier. Imports fell 24.1 percent.
The government has halted the yuan’s gains against the dollar and plans to cut export taxes to zero as demand dries up because of the global slump…
“There’s no hope for export demand to recover any time soon,” said Wang Qian, a Hong Kong-based economist at JPMorgan Chase & Co. “How fast imports recover depends on how soon the government’s stimulus package kicks in and creates real demand in major industries.”
The timing of a Lunar New Year holiday masked what would otherwise have been a steeper decline in trade, said Mark Williams, a London-based economist at Capital Economics Ltd. The holiday meant that there were more working days in February this year than in 2008.
The median estimates in a Bloomberg News survey of 16 economists were for a $28.3 billion trade surplus, a 1 percent decline in exports and a 22.5 percent drop in imports.
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In late january and most of February some of the container ships moored in Singapore since last September left (about 30% is my estimate). Since one week ago, they have returned! Not sure where they went during that period, but nopt a good sign. And folks working at or close to the port also commented port capacity utilisation is around 50%, some of it due to mindless capacity expansion coming online, but still the activity in the port is depressing. I think we can forget about that sharp rebound of global trade in 2H of the year if by now we still do not see the effects of re-stocking. Maybe we just have to get use to a reversion to 2004 or 2005 levels of GDP for the next few years here.