China’s imports contracted sharply last month, while exports rose at a slower pace, reinforcing signs of feeble domestic demand despite the lifting of COVID-19 curbs and heaping pressure on an economy already struggling in the face of cooling global growth.
China’s economy grew faster than expected in the first quarter of this year thanks to robust services consumption, but factory output has lagged and the latest trade numbers point to a long road to regaining pre-COVID-19 momentum.
Inbound shipments to the world’s second-largest economy fell 7.9 percent year-on-year, extending the 1.4 percent decline seen a month earlier, while exports grew 8.5 percent, easing from the 14.8 percent surge in March, customs data showed yesterday.
Photo: AP
Economists in a Reuters poll had predicted no growth in imports and an 8 percent increase in exports.
“Given the gloomy outlook for external demand, we think exports will decline further before bottoming out later this year,” Capital Economics Ltd economist Zichun Huang (黃子春) said in a note.
“We still think reopening rebound in domestic demand will drive a recovery in imports over the coming months,” she added.
The downturn in imports suggests that the global economy is unlikely to be able to count much on China’s domestic engine of growth, and as the nation re-exports some of its imports, it also reinforces the extent of weakness in some of its major trading partner economies.
Analysts say the sharp global monetary policy tightening campaign of the past 12 to 18 months and recent Western banking stress remain concerns for the revival prospects of China and the world.
Shipment growth to ASEAN, China’s largest export partner, slowed to 4.5 percent last month from 35.4 percent in March.
Other data showed that South Korean exports to China, a leading indicator of China’s imports, were down 26.5 percent last month, continuing 10 consecutive months of decline.
China’s coal imports fell last month from a 15-month high the prior month, while imports of copper — a proxy for global growth — and natural gas were also down in the same period.
“The contraction of imports may be partly driven by the slowdown of global demand, which in turn affects China’s imports of parts and components for the processing of exports,” Pinpoint Asset Management Ltd (保銀私募基金管理) chief economist Zhiwei Zhang (張智威) said.
The official manufacturing purchasing managers’ index for last month showed new export orders contracting sharply, underlining the challenge facing Chinese policymakers and businesses hoping for a robust post-COVID-19 economic recovery.
Shares in Taiwan closed at a new high yesterday, the first trading day of the new year, as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) continued to break records amid an artificial intelligence (AI) boom, dealers said. The TAIEX closed up 386.21 points, or 1.33 percent, at 29,349.81, with turnover totaling NT$648.844 billion (US$20.65 billion). “Judging from a stronger Taiwan dollar against the US dollar, I think foreign institutional investors returned from the holidays and brought funds into the local market,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said. “Foreign investors just rebuilt their positions with TSMC as their top target,
H200 CHIPS: A source said that Nvidia has asked the Taiwanese company to begin production of additional chips and work is expected to start in the second quarter Nvidia Corp is scrambling to meet demand for its H200 artificial intelligence (AI) chips from Chinese technology companies and has approached contract manufacturer Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to ramp up production, sources said. Chinese technology companies have placed orders for more than 2 million H200 chips for this year, while Nvidia holds just 700,000 units in stock, two of the people said. The exact additional volume Nvidia intends to order from TSMC remains unclear, they said. A third source said that Nvidia has asked TSMC to begin production of the additional chips and work is expected to start in the second
REVENUE PERFORMANCE: Cloud and network products, and electronic components saw strong increases, while smart consumer electronics and computing products fell Hon Hai Precision Industry Co (鴻海精密) yesterday posted 26.51 percent quarterly growth in revenue for last quarter to NT$2.6 trillion (US$82.44 billion), the strongest on record for the period and above expectations, but the company forecast a slight revenue dip this quarter due to seasonal factors. On an annual basis, revenue last quarter grew 22.07 percent, the company said. Analysts on average estimated about NT$2.4 trillion increase. Hon Hai, which assembles servers for Nvidia Corp and iPhones for Apple Inc, is expanding its capacity in the US, adding artificial intelligence (AI) server production in Wisconsin and Texas, where it operates established campuses. This
Garment maker Makalot Industrial Co (聚陽) yesterday reported lower-than-expected fourth-quarter revenue of NT$7.93 billion (US$251.44 million), down 9.48 percent from NT$8.76 billion a year earlier. On a quarterly basis, revenue fell 10.83 percent from NT$8.89 billion, company data showed. The figure was also lower than market expectations of NT$8.05 billion, according to data compiled by Yuanta Securities Investment and Consulting Co (元大投顧), which had projected NT$8.22 billion. Makalot’s revenue this quarter would likely increase by a mid-teens percentage as the industry is entering its high season, Yuanta said. Overall, Makalot’s revenue last year totaled NT$34.43 billion, down 3.08 percent from its record NT$35.52
RSS