Coronavirus batters trade, hits exports and imports in China

Beijing: China's exports plummeted in the first two months of this year on the back of a coronavirus epidemic that forced businesses to suspend operations, disrupting the world's supply chains.

Exports fell 17.2 percent from a year ago, the biggest drop since February 2019 during the trade war with the United States, and imports dropped 4 percent, according to customs data released on saturday.

A Bloomberg poll of economists had expected a smaller fall in exports, by 16.2 percent, but had forseen a much starker drop on imports of 16.1 percent.

Coronavirus cases were first reported last December in Wuhan, in China's central Hubei province, prompting a lockdown of the key industrial region with some 56 million people, from late january.

Measures to contain the outbreak that has killed over 3,000 in the country, including travel curbs and quarantines, have hit the workforce and supply chains.

China's trade surplus with the US a key point of contention in the trade dispute between the two countries sharply narrowed 40 percent in the first two months, from $42 billion last year to $25.4 billion.

It is the first time Chinese authorities have published combined trade data for january and february.

Moody's Analytics economist Xu Xiaochun told  on saturday that the slowdown is likely to continue into parts of march.

Outbreaks beyond China, such as in South Korea and Europe, will further harm Chinese exports since external demand will be lower, Xu said.

In another early sign of the economic impact to come, China's manufacturing activity fell to its lowest level on record in february, and non-manufacturing activity plummeted too.

“What began as a supply shock in China has morphed into something much more serious.” Oxford Economics said in a report on friday.

The disruptions call into question China's ability to hold up its end of a partial trade deal signed with the US in January, in which Beijing committed to boost purchases of US goods and services by $200 billion.

But Chinese authorities have stressed that the impact of the epidemic would be “short-term” and has rolled out a host of support measures.