Chinese imports tumble, as trade surplus grows

China��s trade surplus widened more than expected in January amid a sharp drop in imports, although analysts cautioned against alarm, saying the data may reflect holiday-related distortions rather than deterioration in underlying economic trends.

China��s trade surplus totaled $27.3 billion for the month, compared to $16.5 billion in December, according to data reported Friday by the state-run Xinhua news agency, outpacing expectations for a $10.6 billion surplus according to a poll compiled by Dow Jones Newswires.

Imports for the month were down 15.3% from a year earlier, while exports contracted a 0.5%, according to the Xinhua-reported figures.

Piper Jaffray sales trader Andrew Sullivan in Hong Kong said there was little in Friday��s batch of data that could be seen as having meaningful influence on economic planners in Beijing.

��I still do not expect China to change its fiscal policies in the short term,�� Sullivan said, playing down expectations for any easing to banks�� reserve requirements or interest rates.

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He said the surprising drop in imports was hard to read, as it may reflect the impact of factory shutdowns and other dampers on industrial activity brought on by the Chinese New Year holiday last month.

In 2011, the Chinese New Year fell in February, making comparison between this January and last more difficult.

Following the release, Bank of America Merrill! Lynch a nalysts reworked the figures to take into account the five fewer working days this past January versus the same month a year earlier.

Its revised calculations data showed January exports would have risen nearly 29%, while import growth would have been up 10%.

The research broker urged patience, saying a better approach is to combine the January and February data into a single batch and then compare that to the same two-month period a year earlier, an approach practiced by the National Bureau of Statistics for many of its data points.

IHS Global analysts said that, at first glance, the figures harken back to the apocalyptic times of the economic crisis, but a closer reading showed some important differences.

��This time around, we expect negative trade growth to be much more short-lived, given an unfavorable skew in January��s data from the lunar calendar shift,�� the analysts said in a note following the data.

Still, they sounded a note of worry over the scale of the drop in January imports that ��cannot be entirely explained by the lunar calendar, and adds weight to the view that economic output is slower that headline indicators might suggest.��

They labelled the import data ��dramatically low�� and said that, taken at face value, it reflected ��extremely weak domestic demand, as investment slumps and drags on economic activity.��

IHS said the situation would become clearer when February trade figures are released, adding that they expected the month��s activity to show a pick up in relative terms.

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