China’s export growth halved last month in US dollar terms as imports slowed more than expected. That slowdown tracked recent reports that suggested slower expansion in the country’s manufacturing sector in April, with a spillover into May as last week’s sharp slide in commodity prices showed.
Driving much of the slowdown in activity and the markets is the continuing official crackdown in dodgy financial dealings, especially among so-called ’shadow banks’ who have been active in some markets, including iron ore, gold and copper.
The impact of the crackdown has been dramatic – for example China’s foreign exchange reserves rose well above $US 3 trillion for a third month in a row as the clampdown on dodgy capital transactions hit home.
And China’s sharemarkets hit a seven month low yesterday as the impact of the funding crackdown expanded.
Reining in excessive local government debt and the shadow banking sector in China has been high on the central government’s agenda this year, leading to concerns that tighter liquidity will affect completion of some large infrastructure projects and the housing sector.
Data from China’s General Administration of Customs yesterday showed exports grew 8% on year in dollar terms in April, half the 16.4% rise in March.
Imports rose a still solid 11.9% year on year from April 2016, but that was down sharply from the near 20% growth in March and falling well below forecasts of an 18% rise.
April trade flows took China’s trade surplus to $US38.1 billion, up from $US23.9 billion in March.
Exports to the United States rose 11.7% in April from a year earlier while imports from the US were up just 1.5%.
China’s trade surplus with the US was $US21.34 billion in April, up from $US17.74 billion in March, according to data from China’s customs bureau, while that with the EU climbed $US3.1 billion to $US10.8 billion.
That sluggish rise in inbound shipments follows an independent reading on China’s domestic manufacturing sector for last month that pointed to the slowest expansion since September.
China’s major imports (with the exception of coal) eased in April.
China’s April iron ore imports fell to their lowest since last October as steel mills cut their purchases as stockpiles rose amid worries about slowing manufacturing.
The industry imported 82.23 million tonnes of iron ore in April, down 13.9% from the previous month’s near record 95.6 million tonnes and down 2% the 83.9 million tonnes imported in April a year ago.
Chinese iron ore futures plunged to their lowest since January late last week.
- Copper: China imported 300,000 tonnes, versus 430,000 tonnes in March – down 30.2%
- Crude oil: China imported 34.39 million tonnes, versus 38.95 million tonnes in March – down 11.7%.
- Iron ore: China imported 82.23 million tonnes, versus 95.56 million tonnes in March – down 13.9%.
- Soybeans: China imported 8.02 million tonnes, versus 6.33 million tonnes in March – down 21%.
- Coal: China imported 24.78 million tonnes, versus 22.09 million tonnes in March – up 12.2%
April’s oil imports were still up 5.5% from a year ago. China’s crude oil imports during the January to April period this year rose 12.5% over a year earlier to 139 million tonnes. Natural gas imports during the same period were up 5.4% from a year ago to 20.11 million tonnes, the customs department said
China bought 27.54 million tonnes of the of soybeans during the first four months of 2017, up 18% from the same period of 2016, according to customs data.
China’s copper concentrate and ore imports dropped 16.6% from a month earlier to 1.36 million, though that marked a 7.9% from April last year. China’s coal imports in the first four months of the year jumped 33.2% to 89.49 million tonnes. The 24.8 million tonnes imported last month was up a third from the 18.80 million imported in April last year.
