China's exports fell sharply amid the Corona virus crisis
Chinese exports recorded a sharp decline in the first two months of the year, under the weight of fears of the emerging Corona virus, which paralyzed economic activity and hindered the supply chain in the world.
Chinese exports collapsed 17.2 percent compared to the same period last year, in the biggest decline for Asian giant exports since February 2019 during the trade dispute with the United States. Imports fell 4 percent, according to data released by Chinese customs on Saturday.
Economists polled by Bloomberg predicted a lower decline in exports, likely to reach 16.2 percent, but in return they expected a further decline in imports of 16.1 percent.
The first cases of the emerging coronavirus were recorded in December in Wuhan, in central China's Hubei Province, prompting the authorities to isolate the important industrial area of 56 million people from late January.
And measures taken to contain the disease that has killed more than 3,000 people in China, including movement restrictions and quarantine, have hit a labor and supply network.
Under these circumstances, the surplus in the Chinese trade balance with the United States, which is a major sticking point in the trade dispute between the two countries, shrank by 40% in the first two months, from 42 billion dollars last year to 25.4 billion.
This is the first time that the Chinese authorities have released consolidated trade data for January and February.
The procedure is consistent with how some indicators are issued to mitigate differences after a holiday, but this time the situation is unusual because of the epidemic.
Julian Evans-Pritchard of the Research Center, Capital Economics, said in a report Friday that the merging of January and February data means that “the published growth rate does not fully reflect the size of the recent weakness.”
This is because business disturbances were mostly concentrated in February.
He added that the recent decline in trade was "greater" than the data likely indicates.
Economist at Moody's Analytics, Xu Xiaochun, told AFP on Saturday that the decline was likely to continue in part of March.
He said that «accurate data such as coal and energy consumption, as well as the use of the metro, indicate that workers are slowly returning to their jobs».
An outbreak outside of China , for example in South Korea and Europe, would do more harm to Chinese exports as external demand would be weaker, according to Xu.
In another indication of the expected economic repercussions, the Chinese manufacturing sector activity declined in February to its lowest levels, as well as the non-manufacturing activity.
With the emergence of the emerging Corona virus around the world, the Chinese economic slowdown will not only be its weight on global growth, which could shrink in the first quarter.
"What started as a supply shock in China turned into something more dangerous," the Oxford Economics Institute said in its Friday report.
Business turmoil casts doubt on China's ability to fulfill its side of the partial trade agreement signed with the United States in January, in which Beijing committed to increasing its purchases of US goods and services by $ 200 billion.
However, the Chinese authorities have stressed that the consequences of the virus will be "short-lived" and announced a series of support measures.
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