In January China saw a hefty decrease in imports–15.3%–considerably larger than could be explained away by Lunar New Year factory shutdowns. That, coupled with a drop in exports, led to concerns among analysts that Chinas economy could be slowing considerably more than expected.
While Reuters reported that the drop in exports was nowhere near that in imports, hitting 0.5%, it was still the worst tally since November 2009. Ren Xianfeng, an economist at IHS Global in Beijing, was quoted saying, “A fall of over 15% in January cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower than headline indicators might suggest.”
Because of the effect Lunar New Year has on the Chinese economy, however, policymakers will likely not react hastily, opting instead to take a longer-range view of markets. Analysts believe they will look at combined data for the first two months of the year before deciding whether to continue monetary easing.