China’s import, export growth slows

Trade surplus with US widens in April

BEIJING: China’s import growth slowed faster than expected in April, as inbound shipments of commodities such as iron ore and copper weakened, while export growth more than halved, in line with a general cooling in demand for electronic gadgets.

China’s April imports rose 11.9%, cooling from March’s 20.3% rise, official data showed yesterday, and missing analysts’ expectations for an 18% rise.

Exports rose 8.0% from a year earlier, slowing from a 16.4% rise in the previous month and short of expectations of 10.4%.

While the data shows trade remained robust at the beginning of the second quarter, analysts say the spurt in China’s economic growth seen in the first three months of the year may be as good as it gets as policymakers seek to tighten speculative investment, especially in the property sector.

“Looking ahead, we expect export growth to hold up well given the relatively bright outlook for the global economy this year,” Capital Economics China economist Julian Evans-Pritchard said in a note.

“Growth in inbound shipments will continue to face headwinds, however. In particular, policy tightening will further weigh on domestic demand in coming quarters.”

April’s numbers left the country with a trade surplus of $38.05 billion, which compared with forecasts for $35.50 billion, and above $23.93 billion in March.

The April trade figures are preliminary, with revised data due on May 23.

China’s imports of crude oil, iron ore and copper all fell by volume compared with March, with the data in line with a recent survey of purchasing managers in the manufacturing sector showing April expansion was the slowest in six months.

Despite the slowdown, imports year-todate are still up 20.8% by value, compared with 8.1% growth for exports over the first four months, though analysts say imports could slow further this year.

While China’s economy grew faster than expected in the first quarter, policymakers have moved to reduce financial risks in the economy and stamp out speculative activity in the property market.

Commodity imports have also been hit by falling prices, with iron ore and steel hitting multi-month lows on China’s future markets in April amid concern over rising inventories.

China’s producer price inflation slowed in March for the first time in seven months, with price gains expected to continue to cool.

Exports of electronics and machinery products increased 2% year-on-year in April, customs data showed, slowing from 12.3% growth in March.

China’s surplus with the United States widened in April, meaning pressure from the US for action on the trade imbalance is not likely to go away anytime soon.

The surplus with the US was $21.34 billion in April, up from $17.74 billion in March and higher than the year-ago period, according to data from China’s customs bureau.

Exports to the US, China’s largest export market, rose 11.7% in April from a year earlier while imports from the US rose 1.5%.

China’s large trade surplus with the US has drawn criticism from President Donald Trump.

While the US Treasury Department did not label China a currency manipulator in its most recent report on currency manipulation, the Trump administration has sought other fronts in which to tackle its large trade deficit with Beijing.

Last month, Trump launched a trade probe against China and other exporters of cheap steel into the US market.

And the US Commerce Department said last Tuesday that it would open investigations into possible dumping and subsidisation of imports of tool chests and cabinets from China and Vietnam.

As Trump moves to put America’s interest first and pull out of multilateral trade agreements, China has positioned itself as a supporter of free trade.

Finance leaders of Japan, China and South Korea last week agreed to resist all forms of protectionism in a trilateral meeting, taking a stronger stand than major G20 economies against the protectionist policies advocated by Trump.

While trade friction between China and some key trading partners remains, an overall improvement in global growth means shipments from the world’s largest exporter will likely remain strong this year.

China’s imports and exports are expected to stabilise and improve in the near future, the Ministry of Commerce said last week in its quarterly report on trends in the country’s foreign trade.

Foreign trade is expected to face a better environment in 2017 compared with the past two years, the commerce ministry report said.