Sheng Li/Reuters
Winter swimmers (L) look on as a man (R) wearing a Santa Claus hat and beard jumps into a pool carved into thick ice covering the Songhua River, to celebrate the upcoming Christmas, in Harbin, Heilongjiang province, China, on December 24, 2015.
Export growth in US dollar terms plunged to -25.4% in February year on year from -11.2% in January, according to data released on Tuesday.
The figures were much weaker than analysts expected, with the consensus hovering around -14%.
While some analysts noted the numbers could be partly explained by the Chinese New Year holiday, slumping global demand is more likely.
Analysts at Nomura said the government would have to boost its stimulus spending to get the economy going again (emphasis ours):
Overall, today's trade data, together with high-frequency data and leading indicators, suggest that growth momentum weakened further in January-February.
We maintain our forecast of real GDP growth slowing to 5.8% in 2016 from 6.9% in 2015. After the reserve requirement ratio (RRR) cut on 1 March, we continue to expect three more RRR cuts and two benchmark interest rate cuts this year (see China: The first RRR cut of 2016, 29 February 2016).
Although fiscal policy has turned more proactive with the budget deficit raised to 3% of GDP this year, we believe it will not be enough to offset the slowdown of investment in real estate and associated manufacturing sectors.