China-Import growth declines more as mixed economic recovery continues, export growth slows in April

Data released on Tuesday revealed that China's exports exceeded expectations but expanded more slowly in April, while imports fell more quickly last month as the general mixed post-pandemic economic recovery persisted.

According to figures issued by China Customs, exports increased by 8.5% from a year earlier to US$295.42 billion this month, compared to an increase of 14.8% in March.

According to Wind, a major supplier of financial information services in China, the April result exceeded projections for an increase of 6.4%.

In contrast, imports decreased by 7.9% in April compared to the same month last year, to US$205.21 billion, which was less than Wind's forecast of a 0.1% decline.

However, exports decreased by 6.4% in April compared to a month earlier, while imports decreased by 9.7% in that same period.

China's overall trade surplus increased from US$88.19 billion in March to US$90.2 billion in April.

Beijing has promised to strengthen trade to boost the broader economic recovery, but because of weak global demand, China's exports have suffered.

However, with China's mixed economic recovery, manufacturing activity unexpectedly shrank last month and fell to its lowest level since the post-pandemic restart late last year.

The official manufacturing purchasing managers' index (PMI) decreased from 51.9 in March to 49.2 in April, falling below the 50-point threshold that separates monthly expansion and contraction.

However, during the five-day "golden week" holiday, domestic tourism receipts increased to 101 percent of pre-pandemic levels as Chinese visitors spent 148 billion yuan (US$21.4 billion).

"China’s trade data weakened in April. This is consistent with the decline of the manufacturing PMI. China’s recovery in the service sector is strong, as evidenced by the tourism indicators from the Labour Day holiday," according to Zhang Zhiwei, president of Pinpoint Asset Management.

"The momentum in the manufacturing sector is less clear. The contraction of imports may be partly driven by the slowdown of global demand, which in turn affects China’s imports of parts and components for ‘processing exports’."

"The mixed messages from the economic data are unlikely to push the government to change their policy stance. The top priority for the government is to reduce the unemployment rate, in our view. The government may wait and see if the recovery in the service sector is strong enough to bring the unemployment rate to the pre-Covid level."

While the overall unemployment rate decreased slightly to 5.3% in March, the rate for people aged 16 to 24 increased to 19.6%.

In contrast, imports from the European Union decreased by 0.12% in April as exports to the region increased by 3.87% year over year.

However, compared to the same month last year, shipments to the US dropped by 6.5% in April. Additionally, US imports decreased by 3.1%.

China's largest trading partner, the Association of Southeast Asian Nations, saw exports rise 4.49 percent year over year in April while imports fell 6.25 percent.

In other news, exports to Russia increased by 153.19% in April, while imports increased by 8.06%.

By fLEXI tEAM