China's export growth unexpectedly speeds up in April

Exports in US dollar terms surged 32.3 per cent from a year earlier to US$263.9 billion (S$351.9 billion).
Exports in US dollar terms surged 32.3 per cent from a year earlier to US$263.9 billion (S$351.9 billion).PHOTO: REUTERS

BEIJING (REUTERS) - China's exports growth unexpectedly picked up in April, official data showed on Friday (May 7), as the world's second-largest economy extended its recovery from the Covid-19 pandemic.

Exports in US dollar terms surged 32.3 per cent from a year earlier to US$263.9 billion (S$351.9 billion), according to China's General Administration of Customs, beating analysts' forecast of 24.1 per cent and the 30.6 per cent growth reported in March.

“China’s export growth again surprised on the upside,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, adding that two factors - the booming US economy and the Covid-19 crisis in India, causing some orders to shift to China - likely contributed to the strong export growth.

“We expect China’s export growth will stay strong into the second half of this year, as the two factors above will likely continue to favour Chinese manufacturers. Exports will be a key pillar for growth in China this year.”

Imports were also impressive, rising 43.1 per cent from a year earlier, the fastest gain since January 2011 and picking up from the 38.1 per cent growth in March. It was also slightly faster than the 42.5 per cent rise tipped by the Reuters poll.

China ran a trade surplus of US$42.85 billion for the month, customs said, wider than a US$28.1 billion surplus tipped in the Reuters poll.

However, analysts still expect China’s gross domestic product growth could slow from the record 18.3 per cent expansion in the January-March quarter as the Covid-19 pandemic disrupts global supply chains, slowing movement of goods and driving up shipment costs.

“Despite the upbeat demand outlook and policy support, supply-side constraints including the global chip shortage, shipping disruption, container shortages, and skyrocketing freight rates are expected to persist for some time,” said Christina Zhu, economist at Moody’s Analytics in a note on Thursday.

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.

Etelec electronics, a Zhongshan-based manufacturer of LED lights, stopped taking on new orders from April 26, due to a shortage in integrated circuits, the company announced in a statement seen by Reuters.

China’s official manufacturing purchasing managers’ index last week showed factory activity growth slowed in April from a month earlier.