China exports rise 32.3% over ’20 level

Stimulus packages fuel global demand

BEIJING — China’s trade with the United States and the rest of the world surged by double digits in April as consumer demand recovered, but growth appeared to be slowing.

Global exports rose 32.3% over a year ago to $263.9 billion, in line with March but down from the explosive 60.6% rise in the first two months of the year, customs data showed Friday. Imports increased 43.1% to $221.1 billion, accelerating from March’s 38.1% expansion.

China’s trade gains look especially dramatic in comparison with a year ago, when global economies shut down to fight the coronavirus. Forecasters say growth flattens out once that distortion and seasonal fluctuations are taken into account.

Despite the jump in April’s headline figures, exports are leveling off “and the rebound in imports stalled,” Julian Evans-Pritchard of Capital Economics said in a report. “Demand is probably close to a cyclical peak.”

Global appetite for Chinese goods remained strong last month, thanks to stimulus packages introduced by

developed economies that’s helped to fuel demand for household goods, furniture and electronic devices. With vaccine rollouts accelerating and more economies opening up, China’s export growth was widely expected to moderate this year as consumers start to spend more on services. But April’s data shows that hasn’t happened yet.

“The export figure clearly reflects a recovering and expanding global economy,” said Hao Zhou, an economist at Commerzbank in Singapore. “Robust imports and exports also mean that China’s manufacturing industry is still outperforming the services sector to lead the economic rebound.”

The trade outlook is overshadowed by a tariff war with Washington and surveys that show April growth in export orders weakened. President Joe Biden has yet to say what he might do about reviving talks aimed at ending the trade war.

On the domestic front, economic output in the three months ending in March grew 0.6% from the previous quarter, showing China’s explosive rebound was abruptly slowing. That suggests growth in Chinese demand for iron ore, consumer goods and other imports will cool.

Chinese manufacturers of smartphones, cars, consumer electronics and other goods also are hampered by global shortages of processor chips as industries revive following the pandemic.

April exports to the United States rose 30.8% over a year ago to $42 billion despite U.S. tariff increases that stayed in place after Beijing and Washington agreed to a truce in their trade war last year. Imports of American goods rose 23.5% to $13.9 billion despite Chinese tariff hikes.

China’s global trade surplus narrowed by 5% to $42.8 billion, a sign Chinese demand is recovering faster than in the rest of the world. Its politically volatile surplus with the United States widened by 33.4% to $28.1 billion.

Exports to the 27-nation European Union rose 23.9% over a year ago to $39.9 billion while imports gained $43.3% to $26.8 billion. China’s trade surplus with Europe narrowed by 3% to $13.1 billion.

EXPORTS TO U.S.

The U.S. was the biggest export market last month, accounting for 15.9% of Chinese goods sold abroad. Southeast Asian nations bought 15.6% of exports while the European Union purchased 15.1%.

Exporters benefited from the early reopening of China’s economy and demand for Chinese-made masks and other medical supplies while some governments are reimposing anti-virus curbs that limit business and trade.

The latest Chinese import figures also are inflated by the rise in global prices for iron ore and other commodities. That can make imports look bigger while the amount of goods holds steady or declines.

In the four months through April, Chinese exports jumped 44% over a year earlier to $973.7 billion. Imports rose $31.9 billion to $815.8 billion.

‘NO SHARP TURN’

Liu Peiqian, an economist at Natwest Group, cited increased global demand for microchips, where Chinese companies are a key part of the supply chain, as another reason why “exports outperformance will likely remain a key theme” in China’s recovery. In volume terms, imports of industrial metals and energy products softened slightly in April, she added, suggesting that the domestic demand recovery could still be relatively weak.

At the Communist Party’s Politburo meeting last week, China’s top leaders pledged to accelerate the recovery in domestic demand and reiterated there would be “no sharp turn” on economic policy. But the government is focused on raising consumer spending on goods and services, while taking a cautious stance on property and infrastructure investment, which tends to be more importintensive.

A strengthening recovery in Chinese consumer spending was indicated by the April services purchasing managers’ index compiled by Caixin Media and IHS Markit, which rose to 56.3 from 54.3 the previous month, well above the 50 reading that marks an expansion from the previous month. However, data from a recent five-day public holiday in China showed spending below pre-pandemic levels, suggesting China will remain dependent on overseas demand for much of its growth this year.