China’s April trade surges amid recovery from pandemic shock

China’s April trade surges amid recovery from pandemic shock

China’s exports grew faster than expected in April as global demand stayed strong while commodity prices remained high.

U.S. dollar-denominated exports rose 32.3% from a year earlier, up from a 30.6% increase in March, China’s customs agency said Friday. That beat an estimate of 24.1% growth from analysts polled by Reuters.

Imports rose 43.1% in U.S. dollar terms, also topping expectations of 42.5% growth.

But Zhang Yi, chief economist at Zhonghai Shengrong Capital Management, said it remains to be seen if strong import growth, mainly driven by price inflation, could be sustained as China winds down its fiscal policy support.

Indeed, import volumes for some products are starting to level off. China’s iron ore imports fell 3.5% in April from a month earlier, while copper imports dropped 12.2% on the month.

That made China’s trade surplus at $42.85 billion in April, up from $13.8 billion in March and the $28.2 billion anticipated by economists.

However, analysts still expect China’s economic growth to slow from the record 18.3% expansion in the January-March quarter as the Covid-19 pandemic disrupts global activities across all economic sectors and industries.

A persistent shortage of semiconductors needed for a wide range of products including consumer electronics and cars is also starting to hurt manufacturers, weighing on production.

Damon Harrison
Market Analyst, IPG Group