China’s exports dropped for the first time in over two years due to the Lunar New Year holiday season and falling demand in Europe, Bloomberg reported. Exports declined by 0.5% year-on-year in January. However, Chinese imports also fell by 15.3%, resulting in the expansion of the net trade surplus to US$27.3 billion, according to official figures. The Lunar New Year may have affected the data, but many analysts say a general drop in external demand is also a factor. “Europe’s debt woes will act as a drag on China’s exports and we are likely to see export growth slowing to a single-digit pace this year,” said Yao Wei, an economist at Societe Generale. Chen Deming, China’s commerce minister, warned Thursday that the export figures “cannot make us optimistic” and expressed gloomy prospects for the year ahead.