China exports surge past expectations in March, imports slump
By Michele Maatouk
Date: Friday 12 Apr 2019
(Sharecast News) - Chinese exports surged past expectations in March but imports slumped amid the ongoing trade dispute between the US and China, according to data released on Friday.
Exports rose 14.2% in US dollar terms in March from the previous year following a 20.8% drop in February, but imports declined 7.6% compared to a 5.2% fall the month before. Analysts had been expecting exports to rise 6.5% and imports to edge up 0.2%.
This resulted in a trade surplus of $32.6bn. Meanwhile, China's surplus with the US came in at $20.5bn compared to $14.75bn in February.
Freya Beamish, chief Asia economist at Pantheon Macroeconomics, said the sharp rebound in exports is surprising.
"The Lunar New Year was earlier in February this year, so it's possible that March y/y growth benefitted from more supply coming back online after the break, but we hadn't anticipated this. We try to adjust for the shifting vacation but our model for trade still has residual seasonality, showing a month-on-month leap in March and plummet in February."
Beamish said the steeper March drop in imports year-on-year is not so surprising in the context of the trends painted by the leading indicators.
ING economist Iris Pang said: "Exports jumped on seasonal factors while imports continued to shrink, with less demand for US goods compared to a year ago. In coming months, we expect modest export growth as the base effect fades. The yuan is more likely to depreciate due to its role as a negotiation tool in the trade talks."
She added: "A potential trade deal with the US probably wouldn't help China's exports because the trade talks are focused more on the increase in China's imports from the US. Meanwhile, global growth has been downgraded by the IMF and the World Trade Organization says the conflict over tariffs will hit global trade growth this year. This should be reflected in more moderate export growth from China in the coming months."
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