CHINA unexpectedly posted a rare trade deficit in February as imports surged far more than expected to feed a months-long construction boom, driven by commodities from iron ore and copper to crude oil and coal.

    Imports in yuan-denominated terms surged 44.7 percent from a year earlier, while exports rose 4.2 percent, official data showed yesterday.

    That left the country with a trade deficit of 60.63 billion yuan (US$8.79 billion) for the month, the General Administration of Customs said.

    Customs has not yet published dollar-denominated trade figures, on which most economists and investors base their forecasts and analysis.

    Apart from currency fluctuations, higher commodity prices and the timing of the long Lunar New year holidays early in the year also may have distorted the data. Most of China’s commodity imports grew strongly in volume terms from a year earlier, but dipped from January.

    Still, economists say the upbeat readings reinforced a growing view that economic activity in China and globally picked up in the first two months of the year.

    That could give China’s policymakers more confidence to press ahead with oft-delayed and painful structural reforms such as tackling a mountain of debt.

    Containing the risks from years of debt-fuelled stimulus and heavy spending has been a major focus at the annual meeting of China’s parliament which began Sunday.

    China’s first-quarter economic growth could accelerate to 7 percent year on year, from 6.8 percent in the last quarter, economists at OCBC wrote in a note Monday, while adding that the pace may ease starting in spring.

    “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,” Julian Evans-Pritchard at Capital Economics said in a note.

    “Looking ahead, we expect external demand to remain fairly strong during the coming quarters which should continue to support exports.”

    But he added that it was unlikely the current pace of import growth can be sustained as the impact of higher commodity prices will start to drop out of the calculations in coming months.

    Analysts polled by Reuters had expected February shipments from the world’s largest exporter to have risen 12.3 percent in dollar-terms, an improvement from a 7.9 percent rise in January.

    Imports had been expected to rise 20 percent, after rising 16.7 percent in January. Both export and import growth were seen at multi-year highs.

    China has not posted a trade deficit in dollar terms since February 2014.

    China has trimmed its economic growth target to around 6.5 percent this year, Premier Li Keqiang said in his work report at the opening of parliament Sunday. The economy grew 6.7 percent last year, the slowest pace in 26 years.

    (SD-Agencies)