China’s exports and imports returned to slight growth in April as orders to the United States and European Union surged, offering some positive signals for the world’s second-largest economy after a weaker-than-expected start to 2014.
Analysts said the trade picture was better in April than Thursday’s data suggested, as export figures last year had been inflated by fake invoices before a mid-year crackdown by authorities.
“The external demand side is not such a big problem for China now because the genuine recovery is there,” said Wei Yao, China economist at Societe Generale in Hong Kong. “This is actually offering some support to China’s growth.”
Exports rose 0.9 per cent in April from a year earlier, following falls of 6.6 per cent in March and 18.1 per cent in February, the General Administration of Customs said.
Imports grew 0.8 per cent from a year ago, after an 11.3 per cent fall in March, to produce a trade surplus of $18.5-billion, more than double the $7.7-billion surplus in March.
All three figures bettered the median forecasts in a Reuters poll, with exports and imports defying expectations of another fall.
The pick-up in trade follows a batch of factory surveys for April, after the government unveiled targeted measures to support growth, though both the official and private measures showed export orders had fallen.
Last week, Beijing said it would offer quicker tax rebates for exporters and encourage more high-tech equipment and consumer goods imports to support trade.
Export growth was largely driven by demand from developed economies. Shipments to the United States jumped an annual 12 per cent in April, a sharp pick-up from a rise of 1.2 per cent in March and a drop of 11.3 per cent in February.
Exports to EU surged 15.1 per cent last month, compared with 8.8 per cent growth in March and a 14.4 per cent drop in February.
Emerging markets, including in Southeast Asia, lagged. Exports to ASEAN countries rose 3.8 per cent, slowing from double-digit growth in previous months, and shipments to Brazil ticked up 3.7 per cent from a year earlier.
The trade data is expected to more accurately reflect actual activity from mid-year, following last year’s crackdown on fake trade receipts that were used to evade foreign exchange restrictions.
Those fake invoices have created a high base for export figures which is understating their performance this year, and the distortion is expected to fade after May.
“China’s trade data show signs of recovery but continue to understate the true health of the export sector,” said Julian Evans-Pritchard, China economist at Capital Economics, in a note to clients.
However, some analysts cautioned that did not mean exports were set for a steep recovery, given the weak demand from emerging economies.
“Trade is still quite weak. The G3 market is doing well but the emerging market – Asia – is still struggling,” said Kevin Lai, economist at Daiwa in Hong Kong.
The government has set a target of 7.5 per cent growth for exports and imports this year. China missed its targets of 8 per cent in 2013 and 10 per cent in 2012, and some analysts and officials think this year’s goal could also be tough to reach.
China’s economy grew at its slowest pace in 18 months in the first quarter, and a Reuters poll shows analysts expect growth of 7.3 per cent in 2014, the weakest in 24 years.
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