Sluggish demand widens trade surplus
By Wang Yanlin |
May 11, 2012, Friday
|
Print Edition
Print Edition
China's exports and imports weakened more than feared in April, strengthening the case for more stimulus measures to bolster growth in the world's second-largest economy.
Exports rose 4.9 percent from a year earlier last month to US$163.2 billion, compared with 8.9 percent in March, the General Administration of Customs said yesterday.
Imports edged up 0.3 percent to US$144.8 billion, slower further from the pace of 5.3 percent a month earlier and contrasting with February's 39.6 percent surge.
They created a trade surplus of US$18.4 billion, more than March's US$5.3 billion. In February, China reported a trade deficit of US$31.5 billion, the first in one year and the largest in a decade.
"Both exports and imports weakened more than expected," said Xue Jun, an analyst at CITIC Securities Co. "Imports suffered a stronger setback for sluggish domestic demand, which is a major reason for the rising surplus."
Zhang Zhiwei, an analyst at Nomura, said the set of weak trade data reinforced his view that policy-makers' priorities should lie in promoting growth.
"We expect further policy loosening, with two bank reserve requirement ratio cuts this year, the first likely this month," Zhang said.
The latest trade data cast doubt on the credibility of the official Purchasing Managers' Index, a comprehensive gauge of China's manufacturing activities, which rose to a 13-month high of 53.3 in April.
While optimism in domestic demand becomes uncertain with weak imports, the outlook for external demand also suffers.
At the spring session of the China Import and Export Fair, also known as Canton Fair, which ended last week, contracts worth US$36 billion were signed, a drop of 2.3 percent from the same period last year and a decline of 4.8 percent from the autumn session. It was the first year-on-year decline at the fair since the spring of 2009, at the bottom of the global economic downturn.
Zhou Hao, an analyst at Australia and New Zealand Banking Group Ltd, said exports will be under greater pressure if Europe slips into recession again.
Trade with the debt-stricken European Union rose 0.3 percent to US$170.5 billion between January and April.
In comparison, Sino-US trade expanded 9.2 percent to US$146.1 billion in the same period, and deals with emerging markets remained solid as shipments with Russia and Brazil rose 27.7 percent and 14.4 percent.
Trade with Japan lost 1.5 percent to US$107.1 billion.
In the first four months, China's trade expanded 6 percent to US$1.16 trillion and had a surplus of US$19.3 billion.
The acceleration of surplus growth may trigger another wave of demand for faster appreciation of the yuan, some analysts said. But Chinese authorities have said the yuan has reached a relatively fair value.
Shanghai's trade rose 2.1 percent on an annual basis to US$136.9 billion in the first four months, coming after Guangdong and Jiangsu provinces.
Exports rose 4.9 percent from a year earlier last month to US$163.2 billion, compared with 8.9 percent in March, the General Administration of Customs said yesterday.
Imports edged up 0.3 percent to US$144.8 billion, slower further from the pace of 5.3 percent a month earlier and contrasting with February's 39.6 percent surge.
They created a trade surplus of US$18.4 billion, more than March's US$5.3 billion. In February, China reported a trade deficit of US$31.5 billion, the first in one year and the largest in a decade.
"Both exports and imports weakened more than expected," said Xue Jun, an analyst at CITIC Securities Co. "Imports suffered a stronger setback for sluggish domestic demand, which is a major reason for the rising surplus."
Zhang Zhiwei, an analyst at Nomura, said the set of weak trade data reinforced his view that policy-makers' priorities should lie in promoting growth.
"We expect further policy loosening, with two bank reserve requirement ratio cuts this year, the first likely this month," Zhang said.
The latest trade data cast doubt on the credibility of the official Purchasing Managers' Index, a comprehensive gauge of China's manufacturing activities, which rose to a 13-month high of 53.3 in April.
While optimism in domestic demand becomes uncertain with weak imports, the outlook for external demand also suffers.
At the spring session of the China Import and Export Fair, also known as Canton Fair, which ended last week, contracts worth US$36 billion were signed, a drop of 2.3 percent from the same period last year and a decline of 4.8 percent from the autumn session. It was the first year-on-year decline at the fair since the spring of 2009, at the bottom of the global economic downturn.
Zhou Hao, an analyst at Australia and New Zealand Banking Group Ltd, said exports will be under greater pressure if Europe slips into recession again.
Trade with the debt-stricken European Union rose 0.3 percent to US$170.5 billion between January and April.
In comparison, Sino-US trade expanded 9.2 percent to US$146.1 billion in the same period, and deals with emerging markets remained solid as shipments with Russia and Brazil rose 27.7 percent and 14.4 percent.
Trade with Japan lost 1.5 percent to US$107.1 billion.
In the first four months, China's trade expanded 6 percent to US$1.16 trillion and had a surplus of US$19.3 billion.
The acceleration of surplus growth may trigger another wave of demand for faster appreciation of the yuan, some analysts said. But Chinese authorities have said the yuan has reached a relatively fair value.
Shanghai's trade rose 2.1 percent on an annual basis to US$136.9 billion in the first four months, coming after Guangdong and Jiangsu provinces.
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