Trade data suspicions linger as China's April exports surprise
Mainland trade surplus more than doubles to US$18.45b although distortions remaindue to effect of last year's inflated data
Mainland exports and imports are likely to improve further due to recovering demand from Europe and the United States, but the extent of the rebound remains uncertain, with analysts having a tough time making accurate predictions about the trade situation.
Last month's official trade data, released yesterday, again caught analysts off guard - although it was at least a positive surprise this time around.
Exports and imports both unexpectedly slumped in March thanks to a high comparison base caused by rampant over-invoicing a year earlier.
But exports gained 0.9 per cent year on year in April to US$188.5 billion, reversing a 6.6 per cent decline in March and an 18 per cent fall in February, the customs administration said yesterday. The result beat market expectations of a decline in exports of about 3 per cent.
Imports climbed 0.8 per cent year on year last month, helped by robust demand for commodities including crude oil and copper, after falling 11.3 per cent in March.
The mainland's trade surplus more than doubled to US$18.45 billion last month from US$7.7 billion in March, easing depreciation pressures on the yuan, according to some analysts.
However, the trade picture still appeared distorted, with the impact of the high year-earlier comparison base seen as likely to fade this month. In May last year regulators began to crack down on trade arbitrage betting on yuan appreciation.
Jin Baisong, a senior researcher at the Ministry of Commerce, estimated that exports might actually have grown by 5 per cent to 7 per cent last month if the distortions were removed.
"The mainland's exports to Hong Kong surged about 60 to 70 per cent in the first four months of last year, which was absurd," Jin said.
Mainland exports to the US grew by 12 per cent year on year last month and those to the EU by 15.1 per cent, while goods shipments to Hong Kong declined by 31.4 per cent due to the crackdown on "round-tripping" activities, according to ANZ Bank.
"China's export growth will show a marked rebound starting in May," HSBC economist Ma Xiaoping said. "Beijing's recent pro-growth policy may also exert a further impact, boosting imports over the next few months."
The State Council decided on April 30 to speed up export rebates and streamline customs procedures, among other steps, to bolster trade growth. The government also cut tax for small businesses as part of efforts to boost economic growth, which slipped to an annual rate of 7.4 per cent in the first quarter from 7.7 per cent in the fourth quarter of last year.
Jin also said he believed export growth would accelerate, while adding a note of caution about the global recovery.
US gross domestic product growth almost stalled in the first quarter of this year, up only 0.1 per cent, he noted.
Demand in Japan was "not very optimistic" following a consumption tax increase last month, although the European economy was likely to fare better than last year, Jin said.
Adding to doubts were weak export orders shown in the official purchasing managers index for April and a 12.6 per cent fall in the total value of contracts signed at the recent Canton Fair.