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China's Exports Fall More Than Forecast

China Trade 021516

China's exports declined more-than expected in January suggesting that the economy has not gained yet from the weaker currency.

Data published by the General Administration of Customs showed that exports logged a double-digit annual decline of 11.2 percent in January, much faster than the 2.0 percent fall economists had expected, and December's 1.4 percent drop.

Similarly, imports slumped 18.8 percent in January from a year ago, data showed Monday. The expected decrease for the month was only 3.9 percent.

The visible trade surplus of the country came in at $63.29 billion in January, which was above a $60.6 billion surplus economists had forecast, and December's $60.1 billion surplus.

In yuan terms, exports fell 6.6 percent and imports plunged 14.4 percent in January.

Data for January and February are usually viewed cautiously as it turns volatile due to the timing of Lunar New Year holiday.

Commodity import volumes remained resilient and we suspect that at least some of the weakness in the data reflects distortions due to Lunar New Year and illicit capital flows, Julian Evans-Pritchard at Capital Economics, said.

The economy had expanded 6.9 percent in 2015, the slowest pace in 25 years as the nation strives to shift its focus to domestic consumption and away from exports.

The International Monetary Fund expects only 6.3 percent growth for China in 2016 compared to an estimated 6.8 percent last year.

People's Bank of China will not depreciate the currency when trade opens Monday after a week long holiday, Governor Zhou Xiaochuan said in an interview with Caixin magazine.

He played down speculation of a planned tightening of capital controls. Zhou said capital outflows are normal.

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