China’s exports plunged in the first two months of 2020 as a fast-spreading coronavirus outbreak is disrupting its corporate operations as well as global supply chains.
China’s official customs data showed on Saturday, March 7, that exports plummeted 17.2% in January-February from a year earlier, the steepest drop since February 2019.
Imports also fell but at the slightly slower speed of 4% from a year earlier.
In December 2019, before the coronavirus epidemic was announced, China’s exports rose 7.9% and imports surged 16.5%.
The world’s second largest economy ran a trade deficit of $7.09 billion for the first two months of this year.
China’s trade surplus with the United States narrowed to 40% in the first two months, from $42 billion last year to $25.4 billion.
China released a gloomy trade report as it struggled to contain the spread of the deadly coronavirus, which has killed more than 3,000 people in the country so far.
The epidemic caused massive disruptions to business operations, global supply chains, and economic activity as its workers had to extend the Lunar New Year break and its businesses saw a much slower return to work.
Trade data echoed an official manufacturing gauge last weekend, which showed China’s factory activity contracted at the fastest pace ever in February, even worse than during the global financial crisis.
Economists fear that China’s economic growth could halve in the first quarter to its weakest since 1990 as the epidemic and government containment measures could cripple factory production and lead to a sharp slump in demand.
In addition, the disruptions raise a question if China can hold up its end of a partial trade deal signed with the United States in January, in which China committed to boost purchases of U.S. goods and services by $200 billion.