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.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
Hong Kong authorities ramped up sales of the local dollar as the greenback’s slide threatened the foreign-exchange peg. The Hong Kong Monetary Authority (HKMA) sold a record HK$60.5 billion (US$7.8 billion) of the city’s currency, according to an alert sent on its Bloomberg page yesterday in Asia, after it tested the upper end of its trading band. That added to the HK$56.1 billion of sales versus the greenback since Friday. The rapid intervention signals efforts from the city’s authorities to limit the local currency’s moves within its HK$7.75 to HK$7.85 per US dollar trading band. Heavy sales of the local dollar by
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
RSS