Coronavirus: China’s exports in surprise jump in April, but imports tumble
- China’s exports grew by 3.5 per cent in April and imports fell by 14.2 per cent, presenting a mixed picture of the economic recovery
- Demand shock from coronavirus containment efforts around the world did not appear to place great strain on world’s second largest economy in April
China’s exports returned to growth in April, beating forecasts and suggesting that an expected demand shock from coronavirus containment efforts around the world will come further down the line.
But imports fell by 14.2 per cent from a year earlier, worse than Bloomberg’s poll, the median forecast of which was minus 10 per cent. April’s imports were also well below March’s reading of minus 0.9 per cent, and January-February’s minus 4 per cent.
That means China’s trade balance was US$45.34 billion in April, up from US$19.9 billion in March.
From January to April, exports have fallen in total by 9 per cent, while imports have contracted 5.9 per cent.
There is some suggestion that part of the growth is down to exports of personal protective equipment used around the world to fight coronavirus, however in both volume and value terms this is considered too small of a sector to have materially powered the Chinese economy.
Louis Kuijs, China economist at Oxford Economics, said the April export recovery “could not last”.
“China's external demand is suffering from the impact of lockdowns and social distancing in the rest of the world. But April shipments may have been boosted by exporters making up for shortfalls in the first quarter due to supply constraints then. In any case, as heralded by the weakness of new export orders in the PMIs, exports should weaken significantly in the near term,” Kuijs said.
The numbers, released on Thursday by the General Administration of Customs, also jar with overseas data, which show economies shrinking and consumption contracting while lockdowns persist.
Releases from around the world this week showed the hammering economies are taking because of the virus.
Various parts of the European Union have started to reopen slowly, but their economies have plumbed depths that were previously unthinkable. The Eurozone composite PMI combining both manufacturing and services plunged to an all-time low of 13.6 in April, with a number under 50 signifying contraction in the sector. Business activity, order books and employment all hit record lows.
By way of comparison, even at its lowest ebb in February, China’s composite PMI was only at 28.9.
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China’s efforts to reopen is also proving to be slower than expected. While most businesses and factories have by this stage restarted, few are running close to full capacity.
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The average coal consumption across six major power plants was down 5.4 per cent in the week to May 1, compared to a year earlier. While this may be cheered by environmentalists, it can also be read as a sign that the economy is not moving at full speed.
There were 55.6 per cent fewer passenger trips on China’s railways, roads, waterways and planes in the week through May 2 than a year earlier, while the seven-day average of metro passenger trips in Shanghai on May 3 was down almost 40 per cent from a year earlier.
Economists often look at these passenger metrics to distinguish between performances of different trade sectors. Inter-city travel – such as the road and rail trips – are viewed as indicators of trade in goods, while the urban metro trips are viewed as a decent gauge of trade in services.