China’s exports slumped last month, dealing a blow to hopes that booming sales abroad would offset weak demand at home and drive growth in the world’s second-largest economy.
Exports shrank 7.5 percent in US dollar terms last month from a year earlier, while imports fell 1.9 percent, the Chinese General Administration of Customs said yesterday.
Both numbers came in well below economists’ forecasts. The trade surplus for the month was almost US$59 billion.
Photo: AFP
Bright spots in earlier data, especially from trade and industry, had offered encouragement that China’s goal this year of about 5 percent economic growth was within reach.
Manufacturing companies reported an expansion for the first time since September and new export orders also picked up after contracting for months. Banks including Goldman Sachs and Morgan Stanley raised their annual growth forecasts this week.
“Taking the positive surprise seen earlier this year, we still view that exports should be on a recovering trend, but modestly,” Societe Generale SA Greater China economist Michelle Lam (林雪潔) said. “The data may also lead to some less aggressive expectations for first-quarter GDP out next week.”
That number is due out on Tuesday, along with a raft of other data from retail sales to industrial output that would offer a clearer picture of the outlook.
Expectations that China would rely on demand in other nations to meet growth targets have helped stoke trade tensions with the US and Europe.
Those are not likely to fade even after last month’s slowdown because in some contentious areas China’s foreign sales are still advancing.
Exports of steel products rose 31 percent in the first three months of the year, the most since 2016. Back then, the EU, the US and Japan complained about Chinese steel overcapacity driving down global prices — concerns that have resurfaced in the past year.
In manufactured goods including vehicles and semiconductors — two areas where Western nations are trying to fend off Chinese competition — exports recorded double-digit percentage growth in US dollar terms in the first three months of the year.
Phone sales declined, but the actual number of phones shipped overseas rose 6.3 percent, illustrating how Chinese firms are slashing prices.
Generally, last month’s data need to be set in context of the previous two months, and quarterly data offer a more reliable guide, Pinpoint Asset Management (保銀私募基金管理) president Zhang Zhiwei (張智威) said.
On that basis exports rose 1.5 percent year-on-year, compared with a fourth-quarter contraction, which “shows a reasonable story about external demand,” Zhang said.
Other Asian nations have benefited from signs of improving international demand, with sales to the US and elsewhere driving a continued expansion in Taiwanese and South Korean exports last month.
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