The "Spring Festival Effect" driving export surge

Event: On March 10th, the General Administration of Customs announced the import and export data for January-February. Exports (measured in USD) increased by 21.8% year-on-year, compared to an expected 7.3% and a previous 6.6%; imports (measured in USD) increased by 19.8% year-on-year, versus an expected 6.9% and a previous 5.7%.

Core View: “Spring Festival offset” significantly boosted exports by 8.4 percentage points, while improved external demand contributed an additional 6.8 percentage points to export growth.

January-February exports surged mainly due to the “Spring Festival offset,” with secondary influence from improved external demand. Historically, early-year export growth rates tend to fluctuate significantly, and the combined data for January-February cannot fully eliminate these disturbances. According to the Customs’ “Spring Festival adjustment” model, the impact of the Spring Festival on exports lasts up to a month and a half. During the festival period and until 30 days after Lunar New Year’s Eve, exports are below normal levels. Last year’s Spring Festival was earlier than this year, with more shutdowns, which affected the January-February figures and created a low base. Estimations suggest that the “offset” of the Spring Festival boosted this year’s January-February export growth by 8.4 percentage points; the remaining 6.8 percentage points of rebound aligns with high-frequency indicators (such as a 4.9 percentage point YoY rebound in port foreign trade freight volume, aligned with the lunar calendar). This trend has been ongoing since early January and reflects the influence of improved external demand.

From the product structure perspective, the sectors with the largest rebound are labor-intensive industries more affected by the “Spring Festival offset,” while some intermediate and capital goods exports may reflect emerging demand improvements. The offset impacts all industries, but the magnitude varies. The most significant rebounds are seen in labor-intensive products such as textiles, clothing (up 24.6 percentage points to 14.4%), textile yarns (up 24.6 points to 20.4%), plastics (up 27.3 points to 24.8%), furniture, and lighting. These industries are directly affected by shutdowns and resumption of work during the festival, benefiting more from the “offset” and also showing a recovery linked to rising U.S. demand. Some intermediate and capital goods, like integrated circuits (up 19.9 points to 67.6%), automated data processing equipment and parts (up 11.4 points to 17.4%), ships, and auto parts, also rebounded significantly, driven by accelerated industrialization in emerging economies and increased imports of production materials.

From the country perspective, improved U.S. demand and faster growth in emerging markets remain the two key drivers supporting exports. After adjusting for the Spring Festival, U.S. exports (which rebounded 13.4 percentage points to -16.7%) showed a clear recovery. We continue to emphasize that, excluding special product disturbances, China’s real imports are still weaker than U.S. consumer demand, indicating ongoing motivation for the U.S. to increase imports. Easing tariffs also support this logic. Exports to Africa (up 18.3 points to 40.1%) and ASEAN (up 9.2 points to 20.3%) have strengthened significantly, reflecting faster industrialization and domestic demand in emerging economies, driven by policy expansion, accelerated FDI inflows, and demographic dividends.

From the import perspective, imports of processing trade continue to recover, possibly reflecting ongoing export improvements. January-February imports (USD) increased by 14.1 percentage points to 19.8% YoY. Processing trade imports rose 19.1 points to 37.9%. On the product side, imports of electromechanical products improved notably, up 14.9 points to 23.7%, with integrated circuits (up 23.2 points to 39.8%) showing strong growth. Commodities like copper and iron ore also performed well, up 9.5 and 1.7 points respectively, reaching 42.7% and 11.8%.

Looking ahead, the “Spring Festival offset” may cause March export figures to decline, but annual exports are still expected to maintain relatively high growth. This year’s Spring Festival was later than last year, and exports only returned to normal levels about a month after New Year’s Eve, meaning the offset will boost January-February figures but suppress March data. Nonetheless, the export growth rate after adjustment is expected to remain stable. The strong January-February data also reflect medium-term factors such as improved external demand, inventory replenishment in the U.S., easing tariffs, accelerated industrialization in emerging economies, and China’s increasing export share. The full-year export growth is expected to remain high.

Regular Monitoring: Both January-February exports and imports have strengthened.

In consumer goods, exports of consumer electronics and light industrial products have rebounded. According to key commodity data released by customs, the growth rate of consumer electronics exports continued to rise (+7.0 percentage points to 26.0%), with notable increases in integrated circuits (+19.9 points to 67.6%) and audio-video equipment and parts (+15.8 points to 20.8%), while mobile phones declined (-21.4 points to -10.8%). Exports of light industrial products in January-February slowed slightly (+25.9 points to 16.1%), with furniture and parts (+32.8 points to 24.2%), textile yarns (+24.6 points to 20.4%), and footwear (+23.5 points to 6.1%) showing growth.

In capital, intermediate, and energy/resource sectors, exports also improved. Capital goods such as general machinery (+14.2 points to 17.7%), medical instruments (+17.2 points to 19.2%), and ships (+29.4 points to 54.4%) saw increased growth. Intermediate goods like integrated circuits (+19.9 points to 67.6%) and auto parts (+13.1 points to 12.3%) also rebounded. Energy and resource exports improved as well, with ceramics (+41.1 points to 28.8%) and plastics (+27.3 points to 24.8%) rising sharply, while finished oil (-37.5 points to 4.9%) and rare earths (-69.8 points to 16.5%) declined significantly.

Country-wise, exports to the U.S. rebounded, and exports to other developed and emerging markets also increased. Exports to the U.S. (+13.4 points to -16.7%), EU (+7.5 points to 19.1%), and UK (+5.3 points to 18.3%) improved, while exports to Japan (-3.7 points to 1.5%) slowed. Among emerging economies, exports to Russia (+9.5 points to 13.1%), ASEAN (+9.2 points to 20.3%), and Africa (+18.3 points to 40.1%) all increased, with Latin America slightly declining (-1.3 points to 8.5%).

Imports in January-February saw a significant rebound, especially in electromechanical products. Imports (USD) rose 14.1 points to 19.8% YoY. Specifically, imports of electromechanical products increased notably (+14.9 points to 23.7%), with integrated circuits (+23.2 points to 39.8%) leading the growth. Major commodities like copper (+9.5 points to 42.7%) and iron ore (+1.7 points to 11.8%) also performed well, while crude oil (-9.5 points to -4.7%) and soybeans (-7.5 points to -3.3%) declined.

This report is from the Zhao Wei team at Shenwan Hongyuan Macro.

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