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China’s exports tumbled the most in three years in February while imports fell for a third straight month, pointing to a further slowdown in the economy and stirring talk of a “trade recession,” despite a spate of support measures.
While seasonal factors may have been at play, the shockingly weak readings from the world’s largest trading nation added to worries about a global slowdown, a day after the European Central Bank slashed growth forecasts for the region.
Asian stock markets and U.S. futures extended losses after the data. Chinese stocks sank more than 4 per cent in their worst day in five months.
Global investors and China’s major trading partners are closely watching Beijing’s policy reactions as economic growth cools from last year’s 28-year low. But the government has vowed it will not resort to the sort of massive stimulus it has used in the past, which helped revive demand worldwide.
February exports fell 20.7 per cent from a year earlier, the largest decline since February, 2016, customs data showed. Economists polled by Reuters had expected a 4.8 per cent drop after January’s unexpected 9.1 per cent jump.

“Today’s trade figures reinforce our view that China’s trade recession has started to emerge,” Raymond Yeung, Greater China chief economist at ANZ, wrote in a note.
Imports fell 5.2 per cent from a year earlier, worse than analysts’ forecasts for a 1.4 per cent fall and widening from January’s 1.5 per cent drop. Imports of major commodities fell across the board.
That left the country with a trade surplus of US$4.12-billion for the month, much smaller than forecasts of US$26.38-billion.
Analysts warn that data from China in the first two months of the year should be read with caution due to business disruptions caused by the long Lunar New Year holidays, which came in mid-February in 2018 but started on Feb. 4 this year.
But many China watchers had expected a weak start to the year as factory surveys showed dwindling domestic and export orders and the Sino-U.S. trade war dragged on.

“Seasonal distortions around the Chinese New Year holiday has added noise to the export data in the past two months, and in our view explain most of the surprise (relative to consensus},” wrote analysts at Goldman Sachs, whose estimate for a 20-per-cent export drop was the most pessimistic in the Reuters poll.


Oil lost ground Friday after unnerving economic reports from China and the U.S., although the decline was moderated by the latest report of declining activity in America’s oil patches.
Futures in New York closed down 1 percent, after a monthly jobs report showed U.S. hiring was the weakest in more than a year and China said exports had tailed off in February. Still, prices recouped much of the losses after Baker Hughes said working oil rigs in the U.S. fell for the third straight week.
West Texas Intermediate crude eked out a 0.5 percent gain for the week, despite a barrage of tepid economic reports from around the globe.
“The bearish signs are more prevalent than any kind of bullish ones right now,” said William Rhind, chief executive officer at GraniteShares, a commodity-focused exchange traded fund. “You have a world that is slowing.”
Crude prices climbed more than 25 percent for the year through mid-February as the Organization of Petroleum Exporting Countries and its partners curbed output, and American sanctions on Iran and Venezuela tightened supplies.
But the rally has sputtered since then. This week alone, the European Central Bank cut economic forecasts, China reduced its goal for expansion and the OECD lowered its global projections. The U.S. also reported a surprisingly big jump in oil inventories.
West Texas Intermediate for April delivery closed down 59 cents at $56.07 a barrel on the New York Mercantile Exchange.
Brent for May settlement fell 56 cents, or 0.8 percent, to $65.74 a barrel on the London-based ICE Futures Europe exchange.
Economic Slump
In a possible sign that America’s jobs engine is starting to slow down, non-farm U.S. payrolls increased by a mere 20,000 in February, the Labor Department reported Friday. The median estimate in a Bloomberg survey had predicted a gain of 180,000.
The ECB cut its euro-area growth forecast for the year by the most since the advent of its quantitative-easing program four years ago. Even then, some of its policy makers thought the outlook was too optimistic. Earlier this week, the Paris-based Organization for Economic Cooperation and Development slashed its estimate for world economic growth to 3.3 percent in 2019, downgrading almost every Group of 20 nation’s economy.