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Christine Chan

China's exports grew a stronger than expected 14.7 per cent to US$59.27 billion in the first quarter, contradicting more bearish forecasts based on slowing economies in the United States and Japan.

Imports rose during the same period by 17.3 per cent, year on year, to US$54.54 billion, for a trade surplus of US$4.73 billion, down 9.38 per cent from a year earlier, the foreign trade ministry said, quoting customs figures.

The export growth rate maintained the momentum of the previous quarter's 15.8 per cent increase and January-February's 14.5 per cent growth. Analysts had expected the rate to lose steam since then as the impact of a stumbling US economy kicked in.

Analysts attributed the export strength to the resilience and relative competitiveness of mainland products and continuing strong overseas demand.

While the first-quarter exports increase was little more than half last year's 27.8 per cent growth, it still significantly outpaced those of its Asian neighbours.

Taiwan recorded minus 3.5 per cent growth, South Korea 3.3 per cent and Singapore 7 per cent in the first two months, Morgan Stanley Dean Witter said.

Standard Chartered Bank senior economist Liao Qun said: 'Everybody expected export growth to slow from March onwards, but the US impact has not been as apparent as expected.'

Last month, exports rose 14.9 per cent, year on year, to US$23.14 billion, while imports increased 16.6 per cent to US$20.7 billion, as demand for raw materials declined amid falling exports.

The trade surplus of US$2.37 billion compared with the US$2.3 billion previously, foreign trade ministry figures showed.

'China's export resilience is due to the country being relatively less reliant on information-technology products than neighbours,' said Andy Xie Guoshong, managing director of Morgan Stanley Dean Witter.

Mr Xie said those products accounted for about a third of China's exports, whereas in other parts of the region, it was about one-half.

Strong demand came from all of China's major export destinations, including Europe, Japan and the US.

January-February exports to the US, representing about half of China's exports, continued to grow at a high 11.3 per cent, while Asian and European countries experienced 27.9 per cent and 20.7 per cent growth, respectively, according to BNP Paribas Peregrine.

Meanwhile, Mr Xie singled out Japan's changing pattern of consumption.

'Falling Japanese household income has prompted the Japanese to spend more on cheaper Chinese goods, instead of lavish branded products.'

Last year, US$55 billion, or 22 per cent of Chinese exports, went to Japan, up 40 per cent year on year.

While the US remained the mainland's biggest export market last year, importing US$100 billion worth of products, its growth rate was 18 per cent.

'In the first two months, mainland exports to Japan soared 30 per cent. The trend will continue this year, boosting Chinese exports,' Mr Xie said.

Yet, he fully expected export growth to fall in the second quarter.

'In the second quarter, the slowing US economy could have a more evident impact on mainland exports. A 10 per cent growth rate will be very good given the low US consumption,' Mr Xie said.

He said strong inflows of foreign direct investment (FDI) would continue to underpin the mainland's economic performance despite a worsening trade picture.

In the first two months, FDI grew 24.2 per cent.

Analysts expect gross domestic product to grow between 7.5 per cent and 8 per cent this year.



Exports jump defies China bears