China's export and import growth likely slowed in February, causing its trade surplus to shrink by more than half, a Reuters poll showed, reinforcing views that its economic momentum is weakening as leaders prepare to unveil key targets for 2014.
Soft manufacturing numbers for February have heightened concerns about the extent of the slowdown in the world's second-largest economy, thought its services sector appears to have regained some momentum.
Export growth is expected to ease to 6.8 percent in February compared with a year earlier, compared with 10.6 percent in January. Import growth will also dip, to 8.0 percent, from 10.0 percent.
As a result, the February trade surplus is likely to drop to $14.50 billion, from $31.86 billion in January.
Still, analysts cautioned against reading too much into the figures for the first two months of the year.
"Chinese New Year continues to play havoc with incoming data," Mark Williams and two other Capital Economist economists in a note.
"The rush to complete orders ahead of the festival appears to have boosted exports in January. With this factor no longer supporting exports in February, we suspect that headline export growth will have cooled."
To help smooth out distortions from the week long holiday, which fell predominantly in early February this year, the statistics bureau will release combined data on retail sales, industrial output and investment for January and February next week.
The combined figures for all three indicators are expected to show a slightly slower rate of growth than in December.
"We expect January and February's combined data set to show the Chinese economykicking off 2014 on a weaker, but still acceptable pace," Tao Wang and other economists at UBS in a note.
A surge in new loans last month will also likely taper off sharply in February, the poll showed.
Recent economic data for the economy has been mixed, and the long Lunar New Year holiday has made it harder to assess momentum. Weak investment and declining manufacturing PMI readings have been countered by surprisingly buoyant exports and bank lending.
But weakening output has created concern that the Chinese factory sector is dragging on global activity alongside that of the United States, while European manufacturers have enjoyed a solid start to the year.
In a State of the Union style address to China's annual parliament meeting that began on Wednesday, Premier Li Keqiang said Beijing aims to grow the world's second-largest economy by a simular 7.5 percent this year. Analysts have said maintaining the target after years of breakneck expansion signals that Beijing will remain focused on reforms and rebalancing the economy.
Some analysts have said weak numbers would encourage the government to loosen monetary policy to keep the economy growing at that level.
Source: Reuters
