China’s exports plummeted in the first two months of this year on the back of a coronavirus epidemic that forced businesses to suspend operations, disrupting the world’s supply chains.
Exports fell 17.2%, the biggest drop since February 2019 during the trade war with the United States, and imports dropped 4%, according to official data released Saturday.
A Bloomberg poll of economists had expected exports to drop less, by 16.2%, but had forseen a much starker drop on imports of 16.1%.
Consumers stayed home during the Lunar New Year break at the end of January and businesses saw a much slower return to work, as the country struggled to contain the spread of the deadly coronavirus, which has killed more than 3,000 people in China alone.
China’s trade surplus with the US, a key point of contention in the trade dispute between the two countries, sharply narrowed 40% in the first two months, from $42 billion last year to $25.4 billion.
Chinese authorities said last month that January and February’s data would be combined.
This is in line with how some other indicators are released, to smooth over distortions from the holiday break.
In an early sign of the economic impact to come, China’s manufacturing activity fell to its lowest level on record in February, with non-manufacturing activity plummeting as well.
Capital Economics’ Julian Evans-Pritchard said in a report Friday that the decision to combine the data in January and February means the “published growth rate won’t fully reflect the extent of the recent weakness.”
This is because the disruption was mostly concentrated in February.
He added that the recent downturn in trade has been “much deeper” than the trade data is likely to suggest.
Coronavirus cases were first reported last December in Wuhan, in China’s central Hubei province, prompting a lockdown of the province, a key industrial region with some 56 million people, in late January.
Travel restrictions and quarantine measures are still in place.
The disruptions call into question China’s ability to hold up its end of a partial trade deal signed with the US in January, in which China committed to boost purchases of US goods and services by $200 billion.
Chinese authorities have stressed that the impact of the epidemic would be “short-term.”
Beijing has rolled out a host of support measures to help firms get back to business, even as economists forecast a significant hit to overall growth.