By Gina Lee
Investing.com – Chinese exports rose in February, continuing a surge recorded in the first two months of 2021. The upward trend reflects strong global demand for manufactured goods, but the figures are partly skewed by the low base in 2020 when the economy shut down due to COVID-19.
General Administration of Customs data released on Sunday said that exports climbed 60.6% year-on-year in February, above the 38.9% growth in forecasts prepared by Investing.com and the 18.1% growth recorded in January.
Exports more than doubled from 2020 in February alone, despite the volatility usually seen in Chinese economic activity for the first two months of the year thanks to the Lunar New Year holiday. The comparison with 2020, when factories and businesses shut down to contain COVID-19, distorted the figures even further in 2021.
Strong demand for medical equipment and work-from-home devices, which has helped to underpin China’s V-shaped recovery from the pandemic since the second half of 2020, also continued to boost exports. Demand has also been helped by improving COVID-19 situations in major trading partners like the U.S. and Europe.
A shorter-than-usual break for migrant workers during the Lunar New Year holiday, and the subsequent early resumption of factory production, also boosted exports. An outbreak of COVID-19 earlier in the year discouraged many workers from the traditional journey back to their hometowns during the holiday.
“Excluding distortions from base effects, trade growth was still quite solid,” Nomura Holdings (NYSE:NMR) Inc. analysts said in a note.
While export growth will likely slow after March as base effects ease, fresh stimulus measures in developed nations, especially in the U.S., “may bolster external demand for Chinese products and partly offset the downward pressure,” the note added.
Imports grew 22.2% year-on-year, against the forecast 15% growth and January's 6.5% growth. The data did suggest a divergence between heavy industries and hi-tech sectors, with the latter outperforming, according to Bloomberg.
The trade balance was at $103.25 billion, against the forecast $60 billion and January's $78.17 billion.