* Exports up 4.9 pct yr/yr (forecast up 8.5 pct) vs 8.9 pct
in March
* Imports up 0.3 pct yr/yr (forecast up 11 pct) vs 5.3 pct
in March
* Trade surplus $18.4 bln (forecast $8.5 bln) vs $5.35 bln
in March
By Aileen Wang and Nick Edwards
BEIJING, May 10 (Reuters) – China’s headline growth in
imports unexpectedly stalled in April and exports were
weaker-than-expected, raising doubts about the strength of the
rebound in the world’s second-biggest economy.
The trade data on Thursday was the first of a flurry of
economic indicators to be released this week – inflation,
producer prices, industrial output, fixed asset investment and
retail sales are all due on Friday – which had been expected to
show a month-on-month improvement in both foreign and domestic
demand.
“Both export and import figures gave the market a downside
surprise,” said Jiang Chao, an analyst at Guotai Junan
Securities, in Shanghai.
“We had expected China’s export growth to reach a trough by
the end of the second quarter, but now I think we will have to
revise down our trade forecast for the full year.”
Annual growth in imports last month was just 0.3 percent,
far below expectations for an 11 percent increase in a Reuters
poll and also weaker than the 5.3 percent year-on-year rise in
March. However, the slowdown in headline imports was magnified
by a sharp fall in commodities prices in the past year.
Exports were also softer than expected, growing by 4.9
percent in April from a year earlier, compared with a forecast
of 8.5 percent and March’s rise of 8.9 percent.
That left the country with a trade surplus of $18.4 billion
in April, compared with a forecast of $8.5 billion and March’s
$5.35 billion. Commerce Minister Chen Deming said last week that
the April trade surplus would be around $10 billion.
Trade figures from the second quarter tend to give a clearer
picture of the emerging trend for the year, given the volatility
in first-quarter numbers distorted annually by shifts in the
Lunar New Year holidays.
Asian shares fell after the data and the
Australian dollar, sensitive to expected demand from
the biggest market for the country’s commodities, pared gains
made after strong local jobs data.
SLOWDOWN BITES
Hurt by a recession in Europe and a patchy economic recovery
in the United States – China’s two biggest trading partners
-export growth has slumped to single-digit levels this year, a
long way from growth of more than 20 percent seen in 2010.
To cope with the slowdown, China has tilted policy away from
containing inflation and towards supporting growth. Beijing has
been aiming for its total trade to grow at an average annual
pace of 10 percent in the years between 2011 and 2015.
China has followed a programme of “fine-tuning” of economic
policy since the autumn, tweaking taxes and licence fees and
cutting the amount of cash banks are required to hold in
reserves to keep credit creation in line with the official 14
percent target for money supply growth.
Despite those efforts, China is still likely to see its
slowest year of economic growth in a decade in 2012, according
to the consensus forecast of 8.4 percent.
“I’m very surprised by the data … It’s hard to say that Q1
is the trough,” said Jianguang Shen, chief economist at Mizuho
Securities Asia in Hong Kong.
“If the government does not relax policies further, all
factors that dragged growth down in the first three months will
still remain in the second quarter.
China’s manufacturers had shown signs of improvement in
April, with export orders ticking up and output gathering pace
among bigger plants in the country’s vast factory sector,
according to surveys of purchasing managers last week.
But the just-concluded Canton Fair, a bi-annual export trade
fair widely considered a barometer of China’s export growth, saw
the value of signed export deals shrink 2.3 percent from a year
ago, the first annual drop since the global financial crisis,
which has fanned worries over the strength of world demand.
China’s export sector dragged on the economy in the first
quarter of 2012, with net exports subtracting 0.8 percentage
points from GDP, which grew at its slowest annual rate in nearly
three years at 8.1 percent.
