China exports leap 18.7% in March
Print Edition
CHINA’S economy received a much-needed fillip in March as exports rose for the first time in nine months, far outstripping analysts’ forecasts in the process
According to figures released yesterday by the General Administration of Customs, exports in the month gained 18.7 percent year on year to 1.05 trillion yuan (US$162.6 billion), reversing a 20.6 percent drop in February.
Actual growth was 3.8 points better than the market forecast.
Imports data for the month were less impressive, however, falling 1.7 percent year on year to 855 billion yuan. The monthly dip was the 17th in a row, albeit a big improvement on the 8 percent decline recorded in February.
The import-export data resulted in a trade surplus of 194.6 billion yuan in March, down from 209.5 billion yuan a month earlier.
Customs spokesman Huang Songping attributed the bulk of the export growth to a low comparative base and strong policy support.
Free-trade deals, improvements in the ailing manufacturing sector and a stable yuan exchange rate also contributed, he said.
The better-than-expected results came after other March economic indicators hinted at improvements in manufacturing activity and steady inflation.
The National Bureau of Statistics on Tuesday reported that the Producer Price Index — a measure of inflation at the factory gate and indicator of future retail prices — rose 0.5 percent month on month in March, its first increase since January 2014.
Earlier, official data showed that activity in China’s manufacturing sector in March expanded for the first time in eight months, with the Purchasing Managers’ Index up 1.2 points from February at 50.2.
Australia & New Zealand Banking Group yesterday described the export data as “solid,” even after accounting for the low base effect.
“This is consistent with the better-than-expected PMI in March,” the company said in a note.
“Strong exports are possibly due to the recent pickup of electronic supply chains, while import data indicate a stabilization of commodity prices.”
HSBC, however, warned of the seasonal distortion to the February and March figures caused by the Chinese New Year.
In the first quarter as a whole, exports fell 4.2 percent year on year, while imports lost 8.2 percent.
Li Jing, China economist at HSBC, said the recovery in exports was still very fragile considering the tepid growth outlook for China’s main export markets, the European Union and United States.
“Domestic demand remains the key driver for economic growth in 2016,” he wrote in a note.
“This suggests that more policy easing measures are needed to support domestic demand and mitigate the downside risks brought by persistent deflationary pressures.”
The government will this year seek to sustain growth momentum through stronger fiscal stimuli, Li said, adding that he expects interest rates and banks’ reserve ratio to be cut by 50 and 350 basis points, respectively.
China’s trade fell 7 percent year on year in 2015 to 24.6 trillion yuan, missing its target — of 6 percent growth — for a fourth consecutive year. Exports fell 1.8 percent in the period, while imports lost 13.2 percent.
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