China's exports rise at robust pace in March, import growth surges to highest in 4 years

China's exports in dollar terms soared 30.6 per cent in March from a year earlier.
China's exports in dollar terms soared 30.6 per cent in March from a year earlier.PHOTO: REUTERS

BEIJING (REUTERS) - China’s exports grew at a robust pace in March in yet another boost to the nation’s economic recovery as global demand picks up amid progress in worldwide Covid-19 vaccination, while import growth surged to the highest in four years.

The data suggests the world’s second-largest economy will continue to gather momentum as it emerges from the Covid-19-led slump in early 2020, though a lagging consumer rebound, a resurgence in virus cases in many countries and US-China tensions have raised risks for the outlook.

Exports in dollar terms soared 30.6 per cent in March from a year earlier, but at a slower pace from the record 154.9 per cent growth in February. The analysts polled by Reuters have forecast a 35.5 per cent jump in shipments.

“Strong foreign demand is likely to be sustained throughout the second quarter as the global economy further recovers,” said economist Nie Wen at Hwabao Trust.

“But with the acceleration in global vaccination efforts, industrial sectors in other countries are gradually restarting. It remains to be seen if China’s stellar export growth will begin to slide.”

Despite sporadic Covid-19 cases in China’s border cities, the authorities have been able to largely contain the virus in a boost to the lagging consumer recovery.

Beijing managed to largely bring the pandemic under control much earlier than many countries thanks to stringent anti-virus curbs and lockdowns in the initial phase of the outbreak last year.

Asian stocks markets were broadly positive after the data, with strong imports giving investors confidence that domestic demand is improving as part of the recovery from the pandemic.

The data showed total Chinese imports jumped 38.1 per cent year-on-year last month, the fastest pace since February 2017 on high commodity prices, beating a 23.3 per cent forecast and compared with 17.3 per cent growth in February.

Meat imports of 1.02 million tonnes in March marked the highest monthly volume since at least January 2020, while imports for soya beans, iron ore, copper and crude oil also rose.

China posted a trade surplus of US$13.8 billion (S$18.5 billion) last month, compared with analysts' expectations for the surplus to rise to US$52.05 billion from US$37.88 billion in February.

Trade challenges

Official and private manufacturing surveys in China pointed to robust growth, with export orders returning to growth amid improving foreign demand.

However, many analysts believe exports could lose some momentum in the short term and the advantages of orders transferred from other countries due to coronavirus-related disruptions will begin to abate.

Customs spokesman Li Kuiwen said that overall trade growth in the second quarter could show the pace slowing due to a higher base comparison in the year-ago period when a jump in pent-up demand boosted the headline figures.

Resurgent Covid-19 infections abroad and constraints in global trade have left some companies grappling with prolonged delivery timeframes and surging prices of raw materials.

Makers of cars and electronic devices from televisions to smartphones are sounding alarm bells about a global shortage of chips, which is causing manufacturing delays as consumer demand bounces back from the coronavirus crisis.

Founder Meng Xianglong of Heji Trade & Credit Research Centre, based in the port city of Ningbo, believes the recent surging commodity prices have already deterred some exporters from taking on orders, in signs of weaknesses to come for the next couple of months.

“Factories are now facing a squeeze in profits. Even though today’s data is robust, they’re suffering from pains in reality.”

China’s gross domestic product expanded 2.3 per cent last year. It was the only major economy to post growth last year, underpinned by solid demand for goods such as medical and work-from-home equipment.

Still, the massive initial hit from the Covid-19 crisis meant China’s growth in 2020 was still its weakest in 44 years.

This year, the country has set a modest growth target of at least 6 per cent, as the authorities plotted a careful course out of a year disrupted by Covid-19 and amid heightened tensions with the United States.

President Joe Biden said last month that the US was not seeking confrontation with China over differences on trade.

China’s trade surplus with the US slipped to US$21.37 billion in March from US$23.01 billion in February.