Chinese exports fell 17.2% in January and February (compared to 2019), Chinese customs announced on Saturday.
The drop has been attributed to the new Coronavirus epidemic which has paralysed the country’s economy.
It’s the biggest decrease in exports the Asian powerhouse has suffered since February 2019, when it was in the middle of a trade war with the United States, and worse than the 16% average predicted by economists consulted by the Bloomberg agency.
The long Lunar New Year’s holiday, which fell on January the 25th, was extended until the 10th of February throughout most of the country to try and limit the spread of the epidemic. But the return to work has remained extremely fragmented ever since, with most factories struggling to start production again.
Drastic quarantine measures and persistent traffic restrictions are making it complicated for workers to go back to work, which then affects the supply chains. Merchandise transportation also remains extremely disrupted.
Another sign of the drop in demand, Chinese customs also revealed imports have dropped by 4% for the first two months of the year. Most factories are almost at a standstill and many workers are stuck at home.
Chinese customs added that the country’s external trade surplus with the United States has logically dropped by 40% for January and February, due to the fall in Chinese imports.
The Chinese external trade surplus with the United States fell to 25.4 billion dollars (22.5 billion euros) for the first two months of the year, compared to 42 billion euros in 2019. This trade surplus has been a thorn in the side of the Trump administration and was at the heart of the trade war between China and the US.