China’s foreign trade remains weak in April
Print Edition
CHINA’S foreign trade remained weak in April with exports recovering some ground but still falling and imports slumping further, according to the General Administration of Customs yesterday.
Exports dropped 6.2 percent from a year earlier to 1.08 trillion yuan (US$174 billion) last month, better than the decline of 14.6 percent in March but defying market expectations of mild growth.
Imports lost 16.1 percent to 873.9 billion yuan, decelerating further from the contraction of 12.3 percent a month earlier.
As imports underperformed, the trade surplus widened from March’s 18.2 billion yuan to 210.2 billion yuan in April, up 85.2 percent year on year.
“China’s trade data disappointed again,” said Liu Ligang, an economist at Australia & New Zealand Banking Group Ltd. “As the port throughput data remain soft, we continue to see strong headwinds in China’s trade sector in the foreseeable future.”
Liu said the authorities may reduce tax burden by rolling out additional export tax rebates and may cut interest rates further to reduce traders’ funding costs.
“China likely needs to add targeted stimulus on both fiscal and industrial sectors,” Liu said.
Wendy Chen, a Nomura economist, said the continuation of negative export growth suggested that external demand has not yet improved much. Also, fewer visitors and deals were seen at the biannual China Import and Export Fair, also known as the Canton Fair, which ended on Tuesday, suggesting tough trade prospects.
“The declines in commodity prices remain a major drag on import growth, along with the softening domestic investment demand,” Chen said.
Nomura maintained its forecast of a 6.6-percent expansion for China’s gross domestic product in the second quarter.
China’s economic growth moderated to 7 percent in the first three months, the weakest quarterly expansion in six years after growing 7.4 percent in 2014.
The slowdown prompted the People’s Bank of China to take unexpected policy-easing actions including cuts of both interest rates and the reserve requirement ratio in the past two months.
On Thursday, the International Monetary Fund lowered its projection for China’s economic growth this year to 6.8 percent, making it weaker than China’s official target of around 7 percent.
In the first four months of this year, China’s trade lost 7.3 percent year on year, below the official target of a rise of 6 percent for this year.
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