Further confirmation that the Chinese economy continues to stutter with the slide in imports deepening in April and March’s surge in exports almost halved last month as well.
As a result, China ran another huge trade surplus of more than $US90.2 billion, up from the $US88 billion in March and $US49.5 billion in April 2022 when much of the economy – especially in and around Shanghai, was being locked down.
Exports rose by 8.5% year on year, slightly stronger than the 8% forecast but well below the near 15% reported in March. Imports fell 7.9% after the 1.4% drop in March.
Month on month the picture looked worse – April’s exports fell by 6.4% from March, while imports fell by 9.7%.
The steeper fall in imports was unexpected after the small dip in March (when oil, coal and iron ore imports soared) and is another indicator of the continuing weakness in domestic demand in China, especially in manufacturing.
Crude oil imports were down 1.45% year-on-year after that surprise 22.5% jump in March, while purchases of natural gas were up 11%. Imports from the US dropped by 3.1%, while those from the ASEAN countries and the EU were down by 6.25% and 0.12% respectively.
Exports in April totalled $US295.42 billion amid efforts from China to increase trade with developed countries while exploring new possibilities with emerging economies such as the ASEAN group of countries.
China’s Customs Administration said that exports to Russia were triple what they were in April last year, to $US9.6 billion but fell 6.5% to the US, and 17.7% to the EU.
In the first four months of the year, the country’s exports were up 2.5% to $US1.12 trillion.
The fall in imports was a surprise and was the 7th monthly drop in a row and confirm how wrong many western analysts and brokers were in their China re-opening stories at the start of the year.
Weak domestic demand, lower commodity prices and a stronger dollar were blamed for the fall – copper, coal and oil prices did dip in the month and iron ore slid.
The weakness in imports and domestic demand (Chinese manufacturing activity fell unexpectedly in April) will make it even harder for the economy to get to the targeted growth rate of around 5% this year.
Some economists raised their growth forecasts to closer to 6% following March’s unexpectedly strong trade figures, these numbers will force a rethink.
