China records biggest trade deficit in 20 years

China recorded in February its biggest trade deficit in over a decade (31.48 billion dollars), due to a surge of oil imports, according to figures reported by China Customs on Saturday.

Imports jumped 39.6% year on year to 145.96 billion dollars, while exports rose 18.4% to 114.47 billion dollars.

This is the biggest trade deficit ever recorded by China in a single month since 2000.

For the first two months of the year, China has a trade deficit of 4.25 billion. In January, it had a surplus, but the volume of China’s foreign trade had shrunk because of the impact of Chinese New Year celebrations.

The high level of imports is mainly due to oil imports, which hit last month to a record level of 23.64 million tonnes.

The deficit in February in addition to other economic indicators reflect a slowdown in the second world economy.

The growth of industrial production has dropped to its lowest level since July 2009.

“Overall, we see an acceleration of deteriorating economic conditions,” said Zhang Zhiwei (张智威), an economist at Nomura Securities agency.

“The slowdown occurs more rapidly than expected,” he said.

The record trade deficit could prompt Beijing to further relax its monetary policy to support economic activity, while Chinese exporters are suffering from the impact of the debt crisis in Europe and weak economic growth in the U.S. .

In this context, the objective of foreign trade growth for 2012 was reduced to 10% while in 2011, exports rose by 20.3% and imports by 24.9%.