A disappointing result on China’s trade data for the month of February pushed China’s main indexes lower on Friday. Missing analysts’ expectation of a 4.8 percent decline, China’s dollar-denominated exports plunged 20.7 percent for the month from last year. The world’s second-largest economy also suffered a 5.2 percent fall on dollar-denominated imports, worse than the expected 1.4 percent decline.
The trade balance of China also did not meet the expectation of economists polled by Reuters. Data showed it stood at $4.1 billion, way lower than the expected $26.38 billion figure. China’s trade balance in January came in at $39.16 billion.
Major Chinese indexes, the Shanghai composite, the Shenzhen component, and the Shenzhen composite all plummeted 4.4% percent, 3.248 percent, and 3.791 percent, respectively. Mainland China’s largest shares tracker, the CSI 300, fell by nearly 4 percent.
China Economy Slowing Down
The Lunar New Year Holidays might have contributed to the steep fall, but the trade data results build up market experts’ opinion that the economy of China is indeed slowing down.
ANZ on Friday noted that the disappointing trade data results strengthened its stance that “China’s trade recession has started to emerge.” ANZ Research’s chief economist for Greater China, Raymond Yeung, said, “Looking ahead, we find little reason to expect a rebound in the near term on the back of a sluggish global electronics cycle”.
China and the United States Tariff Agreement
The New York Times in a report on Thursday said the U.S. and China have reached an agreement to remove some tariffs for both countries. But the report said that key details haven’t been decided yet, such as when the tariffs will exactly be removed.
On Wednesday, U.S. President Donal Trump said the negotiations were “moving along very nicely”. The U.S. last week decided to postpone a tariff hike on $200 billion in Chinese goods to give officials time to work out a deal.