Chinese exports miss forecasts in February, but imports jump

China's sales overseas weakened more than expected in February but economists were wary of reading too much into the numbers due to the distortions around the Chinese Lunar New Year, while imports surged - reflecting strong domestic demand.

Exports from Asia's largest economy grew at a 4.2% year-on-year clip in February, after a rise of 15.9% in the month before. Imports on the other hand were stronger, expanding at an annualised clip of 44.7%, which was up from a 25.2% rise in January.

Both figures missed economists' forecasts for growth of 13% and 20%, respectively.

Nonetheless, if both January and February data are combined in order to eliminate distortions from the Chinese Lunar New Year, then exports were ahead by 11% and imports by 34.1%, Julian Evans-Pritchard, China economist at Capital Economics, said.

This year the Lunar New Year holiday fell at the end of January, instead of at the start of February as in 2016.

"We suspect that this largely reflects the boost to import values from the recent jump in commodity price inflation, but it also suggests that domestic demand remains resilient.

"Looking ahead, we expect external demand to remain fairly strong during the coming quarters which should continue to support exports. However, we doubt that the current pace of import growth can be sustained. For a start, the favourable base effects that have boosted commodity price inflation, and therefore import values, will reverse before long. And more fundamentally, with growth in China currently running above trend and both monetary and fiscal policy being tightened, it is only a matter of time before we see a slowdown in domestic demand," Evans Pritchard said.