China’s exports rebounded last month, but imports shrank for a fourth straight month and at a sharper pace, painting a mixed picture of the economy as trade talks with the US reach their endgame.
Exports rose 14.2 percent from a year earlier, customs data showed yesterday, the strongest growth in five months.
Economists polled by Reuters had expected a 7.3 percent gain after February’s 20.8 percent plunge.
However, imports fell more than expected, suggesting its domestic demand remains weak.
Imports fell 7.6 percent from a year earlier, worse than analysts’ forecasts of a 1.3 percent fall and widening from February’s 5.2 percent drop.
That left the country with a trade surplus of US$32.64 billion for the month, according to Reuters calculations based on the official data, much larger than forecasts of US$7.05 billion.
In the first quarter, exports rose 1.4 percent from a year earlier, while imports fell 4.8 percent.
A customs spokesman said he expects mild growth in both exports and imports this quarter.
While export orders remained sluggish, there were signs that a long spell of contraction was easing even as trade talks with the US appeared to be making progress.
Washington and Beijing have largely agreed on a mechanism to police any trade agreement they reach, including establishing new “enforcement offices,” US Secretary of the Treasury Steven Mnuchin said on Wednesday.
However, economists said even if a deal is reached and both sides rescind tit-for-tat tariffs, Chinese exporters would still have to contend with weakening demand globally.
The IMF trimmed its global growth forecast this week to 3.3 percent for this year, while slightly boosting its forecast for China to 6.3 percent, in part because the Sino-US trade dispute did not escalate as much as expected.
Chinese exporters are also likely have to scramble to win back lost market share.
The trade dispute has prompted some US companies to shift purchases of tariff-targeted products like furniture and refrigerators to countries such as Taiwan, Vietnam, South Korea and Mexico, according to a report by S&P Global Market Intelligence’s trade data firm Panjiva.
On imports, analysts said companies might not be restocking their inventories as much as usual due to concerns over the longer-term economic outlook. ‘
China will still need to loosen policy further in coming months to ensure a sustained economic turnaround, they said.
China’s economic growth is expected to cool to about 6.3 percent in the first quarter of the year and might not bottom out until later in the year, a Reuters poll showed.
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