Ex­port uptick a ‘warm­ing’ trend

China Daily (Canada) - - BUSINESS - By LI JIABAO li­ji­abao@chi­nadaily.com.cn

China’s ex­ports and im­ports im­proved mod­estly in April as trade-re­lated re­forms be­gan to show re­sults, eas­ing pres­sure on the growth of the world’s sec­on­de­con­omy. Ex­ports edged up 0.9 per­cent year-on-year to $188.54 bil­lion, com­pared with a 6.6 per­cent drop in March. Im­ports rose 0.8 per­cent af­ter slump­ing 11.3 per­cent in the pre­vi­ous month, the Gen­eral Ad­min­is­tra­tion of Cus­toms said on Thurs­day.

To­tal trade ex­panded 0.8 per­cent, com­pared with a firstquar­ter de­cline of 1 per­cent.

Ex­ports im­proved last month in spite of a high year-ear­lier base caused by fake in­voic­ing, which al­lowed in­di­vid­u­als and com­pa­nies in China to evade reg­u­la­tions on cur­rency flows. Au­thor­i­ties cracked down on that prac­tice in the mid­dle of 2013.

China’s eco­nomic growth will prob­a­bly sta­bi­lize in the com­ing months as a re­sult of the im­prove­ment of ex­ports, an­a­lysts said.

“Ex­ports may have touched bot­tom ear­lier this year and will keep warm­ing up,” said Yang Weix­iao, a se­nior an­a­lyst at Lianxun Se­cu­ri­ties Co Ltd in Bei­jing.

The trade sur­plus, which widened to $18.46 bil­lion in April from $7.7 bil­lion in March, will pro­vide “a cru­cial force in driv­ing up eco­nomic growth this year”.

Louis Kuijs, chief econ­o­mist in China at Royal Bank of Scot­land Plc, re­mained cau­tious.

“We are not sure whether the April trade data will weaken the case for pol­i­cy­mak­ers to pro­vide more sup­port to growth.

“Sub­dued im­port growth re­flects slow de­mand growth in China, al­though im­ports look bet­ter in real terms. Look­ing ahead, we ex­pect ex­port growth to con­tinue to im­prove in the com­ing months while im­port growth may re­main sub­dued,” Kuijs said.

Zhu Haibin, chief China econ­o­mist at JPMor­gan Chase & Co, said that im­prov­ing ship­ments to de­vel­oped mar­kets, es­pe­cially the United States and Europe, drove the upside sur­prise in April ex­ports while “fake ex­ports” con­tin­ued to sub­side.

“Af­ter mixed con­di­tions in the first quar­ter, com­mod­ity

picked up mo­men­tum im­ports in April.

Look­ing ahead, con­struc­tive global growth in the com­ing quar­ters will likely sup­port grad­ual im­prove­ment in China’s ex­port sec­tor,” Zhu said.

Ex­ports to the Euro­pean Union rose a sea­son­ally ad­justed 7.8 per­cent in April, com­pared with a rise of 6.9 per­cent in March.

Ex­ports to the US ex­panded 11.2 per­cent, com­pared with a 2.4 per­cent drop in March.

Ex­ports to Ja­pan fell 1.4 per­cent, in con­trast with a 20 per­cent gain in March.

Ex­ports to the As­so­ci­a­tion of South­east Asian Na­tions grew 1.7 per­cent in April, down from a 23.3 per­cent rise in March.

Ship­ments to Hong Kong fell 4.5 per­cent in April, com­pared with a 3.7 per­cent drop in March, ac­cord­ing to Zhu.

Much of the fake in­voic­ing ac­tiv­ity took place via Hong Kong.

De­spite the mod­est im­prove­ment in April, ex­porters face an up­hill climb. Ex­ports of the world’s largest mer­chan­dise trader have been los­ing steam this year.

The 115th China Im­port and Ex­port Fair, also known as the Can­ton Fair, re­ported the low­est ex­port vol­ume since 2009 as the fair con­cluded on Mon­day in Guangzhou.

Ex­port deals dropped by 3 per­cent from the au­tumn ses­sion to 194.61 bil­lion yuan ($31.7 bil­lion).

The State Coun­cil, China’s cab­i­net, an­nounced mea­sures on April 30 to sta­bi­lize the “se­vere and com­pli­cated” for­eign trade sit­u­a­tion, in­clud­ing en­cour­ag­ing im­ports of ad­vanced equip­ment, key parts, scarce re­sources and con­sumer goods, ex­pand­ing ser­vices trade, cut­ting the ex­port in­spec­tion list and end­ing some fees.

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