China's exports and imports beat estimates for first 2 months, signaling improving demand

China’s exports and imports for the first two months of the year beat estimates, an indication that demand may be improving as Beijing attempts to boost economic recovery

China Trade (Copyright 2023 The Associated Press. All rights reserved)

China’s exports and imports for the first two months of the year beat estimates, an indication that demand may be improving as Beijing attempts to boost economic recovery.

Exports for the January-February period grew 7.1% from a year earlier, customs data released Thursday showed, higher than the 2.3% rise in December.

Imports rose 3.5% from the same time last year, up from a 0.2% growth in December.

China posted a trade surplus of $125.16 billion.

Though China usually releases trade data monthly, the data for the first two months of the year are combined to avoid disruptions from the weeklong Lunar New Year holidays, when many businesses and factories are closed.

The world’s second-largest economy has struggled to bounce back after the pandemic, as it grapples with weaker demand globally as well as a domestic property crisis that remains a drag on the economy. Demand for Chinese exports has also been weak since the Federal Reserve and central banks in Europe and Asia began raising interest rates last year to cool inflation that was at multi-decade highs.

Manufacturing activity in China has also contracted for five consecutive months, according to an official purchasing managers’ index. The PMI has fallen for much of the past year.

China has set a target of around 5% for economic growth this year, Chinese Premier Li Qiang revealed this week at the annual meeting of the National People’s Congress. The target is seen as ambitious by economists who say more policy support is required to boost growth.