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May 9, 2018

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China’s exports rebound while trade surplus with US widens

By Huang Yixuan | 00:49 UTC+8 May 9, 2018 | Print Edition

CHINA’S exports rebounded in April and its trade surplus with the United States grew for the first time in five months at a time of escalating friction between China and US over the imbalance.

Data released yesterday show exports jumped 21.5 percent from the same month the year before, rebounding from a contraction the previous month due to resurgent global demand.

Imports in April also grew more robustly than anticipated, signalling China’s domestic demand is holding up well, good news for policy-makers looking to soften the blow from any trade shocks.

Imports expanded 12.9 percent year-on-year in dollar terms, leaving the country’s global trade surplus for the month at US$28.8 billion, a turnaround from a US$5 billion deficit in March.

China’s trade surplus with the United States in April widened by 43.8 percent from March to US$22.19 billion. It is the first increase since November.

Exports to the US rose to US$36.12 billion in April from US$30.69 billion a month earlier, with the trade surplus with the US widening to US$22.19 billion from US$15.43 billion.

From January to April, China’s trade surplus with the US rose to US$80.4 billion from US$50 billion in the same period last year.

“The widening China-US trade surplus reflects the difficulty of significantly closing the trade gap between the two countries in the near term, but it is unlikely to obstruct the constructive progress made recently,” said Betty Wang, senior China economist at Australia and New Zealand Banking Group.

China’s global exports of steel and aluminium, a major point of contention with Washington and other countries, both rose in April.

Exports of electrical products and automatic data processing gained 15 percent and 22.4 percent year on year in April respectively, up from 2.4 percent and 15.2 percent in March. Exports of electronic integrated circuits also continued to grow by double-digits of 25.7 percent annually last month.

“We think it may have been due to exporters bringing forward their shipments to avoid near-term disruptions to the supply chain amid the trade tensions,” Wang said.

Imports also beat expectations, growing 21.5 percent on-year, beating forecasts of 16 percent growth, and accelerating from a 14.4 percent rise in March.

The strong data suggests China’s domestic demand remains resilient.

Imports were driven by China’s continued appetite for resources and agricultural commodities as well as high-tech products, especially electronic integrated circuits, which have surged 36 percent since the start of the year.

Imports of major commodities, including iron ore and crude oil, rebounded in April as domestic business activities resumed after the Lunar New Year festival.

Imports of high-tech products rose by double digits of 27.5 percent year on year in April, an indicator of China’s economic transition from a low-end to a high-end value chain, Wang said.

China imported US$94.7 billion of chips in the first four months of the year, taking up nearly 15 percent of total imports and possibly signalling solid growth in electronics exports for at least a few more months.

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