China trade: ‘surprise’ exports surge led by Asean shipments, fall of imports eases
- China’s overall exports rose by 14.8 per cent in March compared with a year earlier, while imports fell by 1.4 per cent last month
- Shipments to the Association of Southeast Asian Nations (Asean), China’s largest trade partner, soared by 35.43 per cent, year on year
China recorded robust export growth in March, backing up Beijing’s pledge to shore up trade to support the overall economic recovery, although the surge came with an official warning that “severe and complex” headwinds remain.
Exports significantly beat expectations and rose by 14.8 per cent from a year earlier to US$315.59 billion, ending a run of five consecutive months of declines, data released by China Customs on Thursday showed.
The surge was mainly driven by a sharp increase in shipments to the Association of Southeast Asian Nations (Asean), China’s largest trade partner, which soared by 35.43 per cent, year on year.
“The strong export growth is likely due to strengthened ties with [emerging market] countries and the continued healing of the global supply chain,” economists at Goldman Sachs said.
China’s export growth soared in March. This came as a surprise to the market. Analysts unanimously expected export growth to stay negative in March
Factories running at full capacity having “caught up with the accumulated orders from the past” after coronavirus outbreaks in December and January depleted inventories was also a factor, said Zhang Zhiwei, chief economist at Pinpoint Asset Management.
“China’s export growth soared in March. This came as a surprise to the market. Analysts unanimously expected export growth to stay negative in March,” he said.
“Overall, China’s foreign trade showed strong resilience in the first quarter, with a steady and positive start, laying the foundation for promoting stability and improving quality of foreign trade throughout the year,” said General Administration of Customs spokesman Lu Daliang.
But China’s trade outlook will be under pressure due to a “severe and complex” external environment, he added.
“The weakening of external demand caused by high global inflation and sluggish growth of major economies has had a direct impact on China’s foreign trade,” said Lu.
“At the same time, risks such as protectionism and geopolitics have further increased the instability, uncertainty and difficulties of the global economy.”
The sharp export rebound in March will surely help boost [first quarter economic] growth, while it appears [at odds] with slowing global growth, rising geopolitical tensions and entrenched disinflationary pressures in the domestic market
“The sharp export rebound in March will surely help boost [first quarter economic] growth, while it appears [at odds] with slowing global growth, rising geopolitical tensions and entrenched disinflationary pressures in the domestic market,” the analysts said.
China’s shipments to the United States improved but remained soft in March, dropping by 7.68 per cent compared to the same period last year, marking the eighth straight monthly decline.
Exports to the European Union, however, increased by 3.38 per cent, year on year, returning to growth for the first time since September.
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In 2022, exports to the European Union, US and Japan – China’s major developed trading partners – accounted for 36.6 per cent of total exports, Lu added.
Meanwhile, exports to countries that are part of China’s Belt and Road Initiative, which includes the Asean countries, accounted for 32.9 per cent, he said.
Even though the Asean region has become China’s biggest trading partner, stabilising exports to developed economies remains of great importance for overall foreign trade, said an article from China Trade News – the official newspaper governed by the China Council for the Promotion of International Trade – on Monday.
With the global economy struggling, headwinds faced by China’s export sector are likely to remain strong
“The proportion of China’s trade with developed economies is still relatively high. For example, exports to the United States accounted for 16 per cent of China’s total exports in 2022,” it said.
Export growth should temporarily remain elevated in April, the economists at Nomura added, supported by the low base from the Shanghai lockdown last year.
“But such strength may not be sustainable thereafter. With the global economy struggling, headwinds faced by China’s export sector are likely to remain strong,” they said.
