China had its first monthly trade deficit in three years in February, as strong demand for Chinese goods both internally and around the world led to higher imports of raw materials. Overall foreign trade was stable in year-on-year terms, while declining from the previous month.
The country’s imports surged by 44.7 percent year-on-year in February in yuan-denominated terms, while exports rose only by 4.2 percent, official data showed on March 8.
This led to a monthly trade deficit of 60.36 billion yuan ($8.74 billion), after a surplus of more than 354.5 billion yuan in January, according to the General Administration of Customs.
The last trade deficit was in February 2014. Currency fluctuations, higher commodity prices and the Lunar New Year holiday also may have contributed to the unusual result.
“In addition to the fact that enterprises stop exporting during holidays, the major reason for the deficit is that China is buying more commodities from overseas at surging prices,” said Zhang Yongjun, a researcher at the China Center for International Economic Exchanges. He said the deficit is unlikely to persist.
China’s commodity imports, including iron ore, copper, crude oil and coal, continued to grow in the first two months of this year and generally saw an increase in prices. The country bought 175 million metric tons of iron ore and 65.8 million tons of crude oil from global markets in the two-month period of January and February, up by 12.6 percent and 12.5 percent year-on-year respectively.
The average prices per ton for these two commodities were 532 yuan and 2,673 yuan, jumping 83.7 percent and 60.5 percent from the same period a year earlier.