Chinese imports plummeted and export growth slowed in April as the recovery faltered, raising concerns about the country’s ability to boost the global economy.
Overseas shipments rose 8.5% from a year earlier to $295 billion, the Customs Administration said in Beijing on Tuesday — a slowdown from March’s double-digit gain. However, imports fell 7.9% to $205 billion, much worse than the median forecast of a 0.2% contraction. That left a trade surplus of $90 billion for the month.
The unexpected slump in imports poses problems for economies that had expected China’s exit from Covid Zero to boost their own export growth. The recovery so far has been driven mostly by consumer spending rather than infrastructure and real estate investment. That’s lower demand for commodities like crude oil, iron ore and copper, imports of which fell month-on-month in April.
“Neighboring countries like Japan and South Korea are disappointed as they expected China’s reopening to have a positive impact on their economies,” said Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered Plc.
Exports were helped by a favorable comparison to this time last year when Shanghai was in lockdown. Economists are warning that rising prices and interest rates in the rest of the world, high inventories and the war in Ukraine will weigh on global consumer demand – meaning the rise won’t last forever.
China’s strong exports “cannot last if the US falters and Europe’s economy somehow stagnates,” said Iris Pang, chief economist for Greater China at ING Groep NV in Hong Kong.
The drop in imports also suggests there are more concerns about the sustainability of China’s recovery.
“Imports have been quite disappointing and would worry China’s demand recovery story,” said Xiaojia Zhi, chief China economist at Credit Agricole CIB in Hong Kong.
She hinted that falling prices for imported items, including energy products, could hurt headline numbers. Tech imports shrank due to global electronics demand slowdown and supply chain shifts.
The trade data has also sparked speculation as to whether the authorities will take further supportive measures to help the economy.
Analysts at Guotai Junan Hong Kong Ltd believe a rate cut this quarter is “increasingly likely”.
ING’s Pang also sees possible future government support given the impact of the deteriorating global economy on China’s manufacturing sector.
She presented potential options, including supporting the industry’s labor market through subsidies for electric vehicles, accelerating the delivery of infrastructure projects, or other means.
Other trade data highlights included:
- Southeast Asian countries were China’s largest trading partner in the first four months of this year
- Trade with ASEAN countries reached US$305 billion, up 5.6% year-on-year and accounting for 15.7% of China’s total trade
- US-China trade was $218 billion, down 11.2%, while trade with the EU fell 3.5% year-on-year to $263 billion
- Automobiles led the jump in China’s overseas shipments in the first four months of the year, more than doubling in value from a year earlier
- This was followed by a 41% increase in refined oil and a 33% increase in steel products
–With the support of Ran Li, Yujing Liu and Wenjin Lv.
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