China's exports reached an all-time low in 2020's first two months. Factors that adversely affected markets were presumed as the primary cause of the decline including the public health crisis in the country and the concurring trade tensions between China and the United States.
China experienced a 17.2 percent drop on its exports from February 2019. The country allegedly lost exports due to the subsisting trade war between China and the US and the recent public health crisis that adversely affected global supply chains.
The US imports to China also decreased by four percent. According to a poll of economists from Bloomberg, they expected a smaller percentage of export declines. They initially forecasted a 16.2 drop. However, it was the imports incurred the largest drop at 16.1 percent.
According to the report, China's trade surplus with the US and the trade dispute resulted in a 40 percent drop in the first two months of 2020. The trade deals between the China and the US was down to 25.4 billion USD for January and February 2020 from 42 billion USD in 2019.
It was highlighted that indicators such as the Lunar New Year holiday and the unusual public health crisis resulted in the significant drops of imports and exports to and from the country.
According to Capital Economics' Julian Evans-Pritchard, the declines proved that growth rates of China for this year would not fully reflect the extend of its economic decline in recent months. He claimed that the disruptions to the economy were mostly concentrated during February and that the downturn in trade may be worse than initially reported.
Economist from Moody's Analytics Xu Xiaochun also claimed that the Chinese economic slowdown may continue until March. He said that coal and energy consumption including metro usage also manifested that people in China continue to resume work despite the public health risks.
The report further discussed that outbreaks occurring in South Korea and Europe would continue to adversely affect Chinese imports. It was perceived that external demand for products and services from the country would decline further in the coming months, Xu added.
Oxford Economics also claimed that the supply shock in China has worsened than just a public health crisis. He claimed that China's ability to abide by its trade promises with the US continue to become more challenging to achieve. He added that the adverse effects of the public health crisis would cause global declines including the trade agreements engaged in the first quarter of the year.