The manufacturing and export sectors are key drivers of growth in China
China’s exports fell in January, the first decline in more than two years, raising fresh concerns about the impact of a global slowdown on its economy.
Exports dipped 0.5% from a year earlier hurt by sluggish demand and factories being shut during the Lunar New Year.
Imports fell by 15.3%, resulting in a trade surplus of $27.3bn (£17bn) which was a six-month high.
The fall in imports comes as China has been trying to boost domestic demand in an attempt to offset slowing exports.
Analysts said while the closure of establishments during the Chinese New Year affected the numbers, the decline could not be attributed to the festival alone.
They said that the bigger-than-expected drop, especially in imports, was worrying as it gave an indication of slowing growth.
“The collapse of imports begs particular attention,” said Ren Xianfeng of IHS Global in Beijing.
“A fall of over 15% in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest.”
Earlier this month, the China Federation of Logistics and Purchasing reported that the import index for January fell to 46.9 from 49.3 in the previous month, showing slowing demand at home.
Despite these numbers, analysts said the dip was likely to be short-lived and imports may start to rise in the coming months.
The export sector has been key to China’s economic growth in the past few years as global firms have turned to Beijing to take advantage of its low-cost manufacturing.
However, a slowdown in the US and the eurozone, which are two of the biggest markets for Chinese goods, has seen the pace of growth of shipments slow in recent months.
China’s surplus with major trading partners has been a hot political issue
The debt crisis in the eurozone and high rate of unemployment in the US have hurt consumer confidence and dented demand for Chinese goods.
Official figures on Friday showed that bilateral trade between China and the European Union fell more than 7% in January.
Analysts said the continuing debt issues in the eurozone were the biggest threat to China’s growth.
“We believe the major drag and biggest risk to China’s growth in 2012 is weaker external demand caused by the ongoing eurozone debt crisis,” said Ting Lu of Bank of America Merrill Lynch in Hong Kong.
“Our European economists expect a moderate eurozone recession at -0.6% in 2012, while nobody knows the exact probability and severity of a collapse of the eurozone.”
China’s trade surplus has been a politically sensitive issue, especially with trade partners such as the US.
Businesses and policymakers have accused China of keeping the value of its currency artificially low in a bid to boost its foreign sales.
They have argued that China’s high trade surplus has been detrimental to their economic growth.
The latest data comes ahead of Chinese Vice Premier Li Keqiang’s visit to the US next week.
Analysts said the latest jump in the surplus was likely to result in added pressure on China, during the vice-premier’s visit, to alter its export-led growth policy.