Exports to the U.S. were a bright spot, but the general picture from China’s latest trade data is that global demand is still subdued, according to a report by Capital Economics.

A sharp slowdown in imports for domestic use rather than processing and re-export is a particular concern, says Capital Economics. Exports increased 18.4 percent y/y in February after falling 0.5 percent y/y in January, according to the data released last Saturday.

Averaging the data for January and February, export growth dropped to 6.9 percent y/y over the last two months, compared with 14.3 percent in Q4. This was the slowest since the crisis period in 2009 and one of the slowest in the last decade, points out the report, which expects export growth to remain under 10 percent y/y in the next few months.

Exports to the EU are struggling, falling 1.1 percent y/y in January and February, compared with 6.5 percent growth in Q4. By contrast, the growth of U.S.-bound exports is stable and in double digits. China sold more to the U.S. than to the EU last month for the first time since 2007. Mark Williams, Chief Asia Economist, and Qinwei Wang, China Economist of Capital Economics, have said that the U.S. looks likely to re-establish itself as China’s largest export market this year.

On a negative note, Capital Economics reports that it is the weakness of imports for domestic use, particularly non-commodity imports that really stand out. Non-commodity imports for domestic use increased 5.3 percent in January and February, down from 21.9 percent in Q4.

The net result was that the trade deficit hit $31.5 billion in February, the largest single-month deficit on record, and $4.2 billion in January and February, which was the largest at the start of the year since 2004. Projections made by Capital Economics suggest the surplus may return in March and, if so, will be small.