China\u2019s exports sector enjoyed a strong recovery in March, after a poor start to the year, but imports continued to slump, suggesting weak demand in the world\u2019s second largest economy.<\/p>\n\n\n\n
Exports grew by 14.2 per cent, a big jump from the 20.8 per cent fall in January and February, the data for which was combined due to the Lunar New Year holiday in February.
This was higher than a survey of economists by Bloomberg, which had forecast growth of 6.5 per cent.<\/p>\n\n\n\n
Imports, however, shrank by 7.6 per cent, after a 19.9 per cent collapse in January and February, below a Bloomberg forecast of 0.1 per cent growth.<\/p>\n\n\n\n
The new data from the General Administration of Customs means that for the first quarter of this year, China\u2019s exports grew by 0.9 per cent while imports contracted by 4.4 per cent.<\/p>\n\n\n\n
China\u2019s trade surplus with the United States was US$20.5 billion in March, according to Chinese customs data.<\/p>\n\n\n\n
This accounted for a large chunk of China\u2019s total trade surplus, which grew to US$32.64 billion in March, up from $4.08 billion over the first two months of the year. This was above forecasts of US$7.05 billion.<\/p>\n\n\n\n
Over the first quarter of 2019, China\u2019s total trade surplus widened to US$76.31 billion, up from US$54.6 billion in the final quarter of 2018.<\/p>\n\n\n\n
The export data compares favourably with that of a year earlier, partly due to the timing of the Lunar New Year holiday in 2018. It came later in the month, meaning business was slower to pick up afterwards, which affected March 2018\u2019s data.<\/p>\n\n\n\n
However, the import data will be a cause for concern in Beijing, coming a day after new inflation data showed a spike in consumer prices.<\/p>\n\n\n\n
China had taken the unusual step of releasing part of March\u2019s data on March 10, in a bid to spread \u201cpositive news that could help shore up confidence\u201d after exports in February posted the steepest drop in three years, analysts said.<\/p>\n\n\n\n
Exports in the first nine days of March surged 39.9 per cent, compared with the same period last year, according to detailed data released at the time by the General Administration of Customs.<\/p>\n\n\n\n
This was due to \u201coverall concern over the economy and negative sentiment that is pervasive among households and companies\u201d, said Allan von Mehren, China economist at Danske Bank at the time.<\/p>\n\n\n\n
Sentiment has been rising among analysts regarding China\u2019s economy, with news that negotiators from the United States and China are close to reaching a deal that would end the 10-month trade war that has seen tit-for-tat tariffs on more than US$400 billion of traded goods.<\/p>\n\n\n\n
On Wednesday, it was reported that China and the United States agreed to set up enforcement offices to monitor implementation of trade pledges, making a breakthrough that paves the way for ending their tariff war. This was one of the major barriers to a deal between the world\u2019s two biggest economies.<\/p>\n\n\n\n
However, in a note released earlier this week, Carlos Casanova, Asia economist at insurance company Coface, said that the underlying data on China\u2019s economy should be some cause for concern, whether a trade deal is reached.<\/p>\n\n\n\n
\u201cAnalysts have become excessively sanguine owing to a prospective trade deal with the US. We expect these to stay in the low single digits, as preliminary indicators remain weak,\u201d he wrote.<\/p>\n\n\n\n
China\u2019s gross domestic product (GDP) growth data for the first quarter of 2019 will be released on April 17, which should offer real evidence of how the trade war has affected the economy.<\/p>\n\n\n\n
On Wednesday, it was announced that China\u2019s consumer price inflation rose sharply in March, as the country struggles to contain the impact of an African swine fever epidemic that has sent pork prices soaring.<\/p>\n\n\n\n
There were further concerns at the end of March, when it was announced that China\u2019s industrial companies saw their profits fall by 14 per cent in the first two months of the year as the impact of the trade war with the United States and widespread economic slowdown continued to take root.<\/p>\n\n\n\n
The International Monetary Fund (IMF) this week upgraded its growth forecast for China, even as it downgraded its forecast for the rest of the world. China will grow at 6.3 per cent this year, the Washington fund predicted, 0.1 percentage point faster than it had previously predicted. Beijing\u2019s recent stimulus moves and a better outlook for a US-China trade deal spurred the change.<\/p>\n\n\n\n
Despite this, the IMF\u2019s deputy managing director Mitsuhiro Furusawa warned on Wednesday that \u201ctrade friction\u201d could led to a worse-than-expected slowdown in the Chinese economy. \u201cIf China\u2019s economy slows more than expected, that is also a risk to the global economy,\u201d he told Reuters.
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