China’s exports have reportedly dropped by 25 percent compared to February of 2015. The trade plummet came as Chinese businesses shut down for the Lunar New Year holiday and global demand weakened.
China’s exports fell by 25.4 percent in February, a steep decline from January’s 11.2 percent fall, according to Chinese customs data released on March 8, reports CBC.
The loss of trade comes as the Chinese Communist Party moves to introduce massive layoffs, while trying to maintain a stable foreign trade. The People’s Congress met this week to announce a higher target for exports after they contracted by 2.4 percent in 2015.
China’s economic growth fell to 6.9 percent last year, hitting a 25-year low. Despite the country’s recent economic woes, however, China still raked in a global trade surplus of $32.6 billion in February 2016.
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China’s customs officials blamed primarily weak global demand for the country’s economic problems, saying that “imports from and exports to major trade partners declined," reports the Guardian.
Much of China’s export declines may be due to falling demand in the United States, its largest trading partner. American demand for Chinese products fell by 15 percent in February 2016.
Michael Every, a researcher at Rabobank Group in Hong Kong, said that more state intervention is needed to save China’s economy.
“More stimulus is likely to be needed on both the monetary and fiscal front, and that will argue against the yuan stability that China craves,” said Every.
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Evan Lucas, an analyst at IG, noted that there is more at work here than just the Chinese New Year.
“Chinese Lunar New Year always skews the February numbers; however, the figure is much lower than expected and such a big miss has created some angst,” said Lucas.
The International Monetary Fund stated that the poor export numbers from China indicate a global “risk of economic derailment”, reports Financial Times.
The IMF recommended that immediate action be taken to boost global demand, and called on countries to grow the global economy.