China surplus jumps on weak imports

China's trade surplus jumped in April as imports and exports both further decelerated

Story highlights

  • China's surplus jumped to $18.4bn in April, compared to $5.25bn in March
  • Imports and exports both further decelerated
  • The latest trade data indicate slowing external and internal demand in China

China's trade surplus jumped in April as imports and exports both further decelerated, renewing fears of a harder than expected landing for the world's second-biggest economy.

Exports grew by just 4.9 per cent from a year ago, compared to 8.9 per cent growth in March. Imports rose 0.3 per cent year-on-year, compared to March's 5.3 per cent increase, according to official data released on Thursday.

China's surplus jumped to $18.4bn in April, compared to $5.25bn in March. This was nearly double the amount that Chen Deming, commerce minister, forecast last week at the US-China Strategic and Economic Dialogue.

These latest trade data indicate slowing external and internal demand in China. "It shows that global demand is still pretty fragile", said Wei Yao, economist at Société Générale.

The Chinese figures correlate with other recent evidence pointing to a slowdown in overseas demand. Export orders at last week's Canton Fair, the world's biggest trade fair, shrank by 2.2 per cent compared to a year ago, the first decline since the global financial crisis. April exports from Taiwan and South Korea, two other big Asian exporters, fell by 6.4 and 4.7 per cent respectively.

However, economists at Goldman Sachs point out that monthly trade data are highly volatile and the April export numbers were partly affected by a high base last year. "We believe this effect will reverse in the next three months starting from May," they wrote in a client note.

The lower level of imports, meanwhile, reflected slowing investment within China, rather than a weakening in Chinese consumer demand, Société Générale's Ms Yao said, adding that this may spur Beijing to cut import tariffs further. She does not expect, however, that China would adjust its interest rate or currency policies as a result.

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