BEIJING: A sharp decline in China's trade surplus in February likely signals a shift in the nation's financial balance with the rest of the world, and may reduce the speed with which it piles up foreign-currency assets such as U.S. Treasury bonds.

China's merchandise exports in February plunged 25.7% from a year earlier, the nation's customs agency said. That's one of the biggest drops on record, and extends the 17.5% fall in January for a fourth straight monthly decline.

Imports declined a slightly less dramatic 24.1%, thanks in part to a pickup in government spending in February. That left a monthly trade surplus of $4.84 billion -- the smallest in three years and a fraction of January's $39.11 billion.

Meanwhile Chinese government data Thursday showed that lending jumped again last month, but weak growth in industrial output suggested the surge in credit isn't yet translating to a strong …