China’s exports in March returned to growth for the first time in nine months, adding to further signs of stabilisation in the world’s second-largest economy that cheered investors.
March exports rose a blistering 11.5 pct from a year earlier, customs data showed on Wednesday, the first increase since June and the largest percentage rise since February 2015.
Economists warned that the data was heavily influenced by base effects and seasonal distortions from the Lunar New Year, and was not necessarily evidence of stronger global demand. Chinese investors celebrated, nevertheless, with key stock indexes hitting three-month highs and the yuan firming.
“China’s foreign trade sector will likely improve from last year due to low comparables, but the improvement will not be dramatic, as the trends in external markets are not great,” said Wang Tie Shi, economist with Industrial Securities.
“We’ve started to see improvement in PMI and other indicators, which points to some degree of recovery going into the second quarter.”
The upside surprise comes after other March economic indicators hinted of slight improvements in the broader economy, although other surveys have shown rising downward pressure on wages and employment.
Imports continued to fall but less than expected, declining by 7.6 percent in dollar denominated terms, led by sharp corrections in imports of tax-free foreign goods, rentals and leasing and imported equipment.
However, import volumes of most major commodities, notably copper and iron ore, rose strongly. That left the country with a trade surplus of $29.86 billion for the month, data from the General Administration of Customs showed, versus a forecast of $30.85 billion.
“I think we should focus on the better-than-expected imports growth rate, which means domestic demand is also recovering, driven by infrastructure investment and also the real estate sector recovery,” said Ma Xiaoping, analyst at HSBC.
MOMENTOUS SHIFT
China’s slowdown might not be quite as severe as first feared but its “momentous” shift from investment-led growth is still having a chilling effect on trade globally, the International Monetary Fund said on Tuesday.
The IMF estimates every 1 percentage point investment-driven drop in China’s GDP, cut growth for the entire Group of 20 nations by 0.25 percentage points.
“Even countries that have few direct trade linkages with China are being affected through the Chinese slowdown’s impact on prices of commodities and manufactured goods, and on global confidence and risk sentiment,” the Fund said.
Regardless, overseas investors also appeared inspired by the trade data. The
