Beijing - AFP
China recorded an unexpected trade deficit of $22.98 billion in February, official figures showed Saturday, with authorities blaming the country's holiday season for the weak performance. The figure compared with a surplus of $14.8 billion in the same month last year, and a median forecast of an $11.9 billion surplus in a poll of 13 economists by Dow Jones Newswires. Exports fell 18.1 percent to $114.10 billion, while imports were up 10.1 percent to $137.08 billion during the month, which included most of the Lunar New Year holiday, the General Administration of Customs said. "The Spring Festival factor caused sharp fluctuations in the monthly growth rate as well as the monthly deficit," Customs said in a statement accompanying the data. Chinese traders followed their "business habit" of bringing forward exports ahead of the holiday, and focusing on imports immediately afterwards, it added. Analysts played down the deficit -- China's first in 11 months -- saying improving foreign demand bodes well for the country's trade this year. "Generally we are rather optimistic about this year's trade outlook," Zhou Hao, a Shanghai-based economist with ANZ, told AFP. The surprise deficit was probably a result of government efforts to curb speculative capital inflows aiming to profit from the appreciation of China's yuan currency, he said. Early last year unusual swings in trade figures were seen as driven by over-invoicing by exporters and importers in a bid to disguise capital flows, a practice the government is believed to have cracked down on later. The yuan's central parity rate against the dollar is set daily by China's central bank, which allows the currency to trade only one percent up or down from it. It has been on a long-term strengthening trend, but was 0.27 percent lower at the end of February than a month earlier, reportedly boosting exporters' profits. "Judging from the overall foreign demand and demand at the enterprises' end, trade growth rate will accelerate in the coming months after offsetting the impact of the holiday and fake trade reporting in January and February," Zhou told AFP. In his government work report to China's Communist-controlled National People's Congress legislature, which opened on Wednesday, Premier Li Keqiang set the target for growth in two-way trade this year at 7.5 percent. The actual increase last year was 7.6 percent, missing the eight percent goal set by authorities. "I think it's very likely (the target will be achieved)... This is a practical target, plus foreign demand is improving," Zhou said. In the first two months of the year, China's exports were down 1.6 percent year-on-year to $321.23 billion and imports rose 10 percent to $312.34 billion, Customs said. The trade surplus in the two-month period narrowed by 79.1 percent on-year to $8.89 billion, it added. Imports of key commodities such as iron ore, crude oil and beans all saw double-digit growth in the first two months of the year, with aluminium showing the biggest rise, jumping 78.8 percent year-on-year according to Customs. Vehicle imports soared by 50.3 percent to 197,000 units in the period, it added.