EnChina’s worse-than-expected decline in exports in February, with a 20.7% year over year decline as outlined in Panjiva’s research of Mar. 8, can in large part be explained by the earlier lunar new year, which fell on Feb. 5 this year from Feb. 15 in 2018. In prior year’s where there was a similar shift – 2014 and 2016 – there were year over year declines of 18.1% and 28.2% respectively, Panjiva analysis of official data shows.
Source: Panjiva
Looking at January and February together there was a 4.6% slide. The slowdown has been particularly marked in older economy products. Indeed the dollar value of the decline in apparel, textiles and agricultural products of $7.73 billion accounted for 45.7% of the drop in exports. The other major contributor, accounting for a further 38.4% of the drop, was a reduction in exports of telecoms equipment.
That would suggest the weakening demand for Chinese goods is being driven by consumer spending and the secular decline in telecoms rather than a widespread collapse in regional supply chains. A recovery later in the year may yet be possible depending on the outcome of the U.S.-China trade talks which should cut bilateral duties at least on a temporary basis.
Source: Panjiva
