MercoPress. South Atlantic News Agency

China’s exports, imports soar in February, in spite of New Year festivities

Growing rift with the US over the value of the Yuan

China's exports jumped by 46% in February compared with a year ago, raising hopes of a strong recovery in global trade. The increase was higher than analysts' expectations of a rise of between 35% and 40%.

It is likely to increase pressure on the Chinese government to raise the value of the Yuan, which the US in particular complains is undervalued. China's imports also rose strongly, increasing by 44.7% last month.

The big growth in imports was helped by the government's economic stimulus spending.

The rise in imports reduced China's trade surplus to a one-year low of 7.6 billion for February. Beijing had kept the Yuan at the same level against the US dollar for 18 months, to help its exporters.

This has angered the US, which says the Chinese government keeps the Yuan unfairly undervalued, and Washington continues to call on Beijing to allow the currency to float freely to reflect its true market value.

China's central bank governor, Zhou Xiaochuan, said at the weekend that the government was “very cautious” about easing exchange rate controls because the global economic outlook was still uncertain.

Analysts said that while the 46% growth in exports in February was obviously very strong, it was inflated by the comparison with February 2009, when shipments fell by 25.7%. However, last month's big rise in exports came despite factories across the country being closed for up to five days over the Chinese New Year.

Last year the New Year festival fell in January.

“There were five fewer [business] days in February this year than last year, which makes [the export] number pretty impressive,” said Royal Bank of Canada senior strategist Brian Jackson.