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.
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