China Jan-Feb exports, imports seen slumping as coronavirus hits output, supply chains: Reuters poll
BEIJING (Reuters) - China's exports and imports likely tumbled in the first two months of the year, a Reuters poll showed, as the health crisis triggered by the coronavirus epidemic disrupted businesses and production and wreaked havoc along global supply chains.
Exports from the world's second-largest economy are expected to have sunk 14% in January-February from a year earlier, according to a median estimate from the survey of 25 economists, marking the steepest fall since February 2019.
Imports likely skidded 15% from a year earlier in the same period, the biggest contraction since January 2016 and a sharp contrast from the 16.5% growth posted in December.
China's customs said last month it would combine January and February preliminary trade data,in line with how some of the country's other major economic indicators are released early in the year, which is intended to smooth distortions created by the long Lunar New Year holidays.
This year, Beijing extended the holidays and instituted widespread transport curbs and other tough public health measures to limit the spread of the virus, which have paralysed large parts of the economy.
The forecasts underlined the crippling effects of the coronavirus epidemic across the country, which also triggered the sharpest contraction in factory activity on record, with sub-indexes for production and new export orders nosediving to levels before the global financial crisis.
Wary of the deepening economic costs, Beijing has urged less affected areas to resume work as soon as possible and rolled out a host of measures to help firms re-start operation, including cheap loans to companies hardest hit by the epidemic.
But migrant worker shortage is still acute in the coastal provinces due to the quarantine rules and travel bans. Some factories that have restarted work are running below normal capacity.
Nomura's Business Resumption Rate (BRR), a gauge to measure the progress of business resumptions, was at only 44.0% as of March 1, a pace well below normal operating levels.
SECOND WAVE OF DISRUPTIONS?
Many Chinese exporters say they faced difficulty in fulfilling overseas orders for February and months to come due to a shortage of workers and raw materials, while seaports that are operating at low efficiency also worsened the logistical problems.
Other producers also suffered suspension of purchases and cancellation of orders from foreign buyers.
The disruptions are already rippling through global supply lines from Asia all the way to the United States, and is expected to lead to weaker foreign demand and patchy global trade in the coming months.