China exports decline in April, compounding pressure on economy

Shipping containers are loaded onto trucks at Dayaowan port in Dalian, Liaoning province, in 2012. China's exports shrank in April, adding downward pressure on an economy grappling with overcapacity and a property slump. -- PHOTO: REUTERS
Shipping containers are loaded onto trucks at Dayaowan port in Dalian, Liaoning province, in 2012. China's exports shrank in April, adding downward pressure on an economy grappling with overcapacity and a property slump. -- PHOTO: REUTERS

BEIJING (Bloomberg) - China's exports shrank in April, adding downward pressure on an economy grappling with overcapacity and a property slump.

Overseas shipments fell 6.2 per cent from a year earlier in yuan value, the customs administration said in Beijing on Friday. That compared with the median estimate for a 0.9 per cent rise in a Bloomberg survey of analysts. Imports slid 16.1 per cent - the fourth straight double-digit decline - leaving a trade surplus of 210.21 billion yuan (S$45.14 billion).

The weaker-than-expected export performance and languishing imports compound challenges for an economy that last quarter expanded at the slowest pace since 2009. The central bank has cut benchmark interest rates and banks' reserve ratios twice in the last six months to cushion the slowdown.

"The data highlights the precarious position of the economy and supports the case for further monetary and fiscal easing," said Dariusz Kowalczyk, senior economist at Credit Agricole SA in Hong Kong.

The Australian dollar, seen as a proxy for China's economy due to its shipments of raw materials, fell after the release.

Exports in previous months were volatile due to distortions from the Lunar New Year holidays, which falls in different weeks early in the year and leads to widespread factory shutdowns. Imports have been weighed by sluggish domestic demand and falling commodity prices.

China's economy expanded at the weakest pace since 2009 last quarter, with industrial output, fixed-asset investment and retail data pointing to a deepening slowdown. While the official manufacturing gauge for April suggested that growth may be starting to stabilize, a private index from HSBC and Markit Economics showed factory activities were still in contraction zone.

Join ST's Telegram channel and get the latest breaking news delivered to you.