China April exports, imports decline more than expected
BEIJING – China’s exports and imports fell more than expected in April, underlining weak demand at home and abroad and cooling hopes of a recovery in the world’s second-largest economy.
Exports fell 1.8 percent from a year earlier, the General Administration of Customs said on Sunday, reversing the previous month’s brief recovery and supporting the government’s concerns that the foreign trade environment will be challenging in 2016.
April imports dropped 10.9 percent from a year earlier, falling for the 18th consecutive month, suggesting domestic demand remains weak despite a pickup in infrastructure spending and record credit growth in the first quarter.
“Both exports and imports came in weaker than expected, in line with the soft trade performance across Asia, pointing to another challenging year for emerging markets,” said Zhou Hao, senior emerging market economist at Commerzbank in Singapore.
China’s exports to the United States – the country’s top export market – fell 9.3 percent in April from a year earlier, while shipments to the European Union – the second biggest market, rose 3.2 percent, customs data showed.
China’s cabinet has vowed to take steps to boost exports, including encouraging banks to boost lending, expanding export credit insurance and raise tax rebates for some firms.
China had a trade surplus of $45.56 billion (31.58 billion pounds) in April, versus forecasts of $40 billion.
Economists polled by Reuters had expected April exports to fall 0.1 percent, after a surprise 11.5 percent rise in March, and expected imports to fall 5 percent, following March’s 7.6 percent decline.
MOMENTUM MAY WEAKEN
China’s economic growth slowed to 6.7 percent in the first quarter – the weakest since the global financial crisis, but activity picked up in March as policy steps to boost the economy, including six interest rate cuts since late 2014, seemed to be taking effect.
Concerns of a hard-landing in China had eased after the strong March data, but analysts have warned the rebound may be short-lived.
Economists expect a slowdown in credit growth and industrial production in April although inflation could accelerate. Key economic data is expected over the next two weeks.
“The market has to prepare a little bit for the downside risk in other Chinese data and some sort of market correction might be inevitable,” Zhou said.
An official factory survey and Caixin’s private-sector gauge for April painted a mixed picture of the health of the manufacturing sector.
The official purchasing managers’ index (PMI) showed factory activity expanded for the second month in a row in April but only marginally, while Caixin’s manufacturing PMI pointed to 14 straight months of sector contraction.
China’s central bank said on Friday that it will fine tune policy in a pre-emptive and timely way, as the economy still faces downward pressure despite signs of steadying.
Amid shrinking global demand, China still managed to grow its share of world exports to 13.8 percent last year from 12.3 percent in 2014, indicating the country’s export sector remains competitive despite higher costs. -Reuters