Imports down 1.9% in dollar terms as March data overshadows positive factory signals
BEIJING — China’s exports in March decelerated sharply after four months of growth, reflecting the unstable recovery plaguing the world’s second-largest economy.
Total overseas shipments declined 7.5% on the year in dollar terms, reversing the 7.1% gain in the first two months of 2024, according to data released by the country’s customs office on Friday, hours later than usual.
The number was well below a 2.3% drop forecast in a Reuters poll of economists.
The subdued data casts a shadow over the positive turn in the official purchasing managers’ index released earlier this month. The gauge of March factory activity rose to 50.8, clearing the 50 mark that separates a contraction from growth for the first time in six months, thanks to new orders.
A downturn in demand for mechanical and high-tech products, as well as garments, contributed to March’s export deterioration, the steepest since an 8.8% plunge last August.
At the same time, the result is partly a correction, as exports had surged 10.9% in March last year, noted Capital Economics. Export prices have stabilized recently, said Zichun Huang, an economist at the U.K. research firm, as the ability to cut prices has diminished due to the share of lossmaking manufacturers “climbing to record highs.”
The reversal in export growth left overall first-quarter shipment growth at just 1.5%. Exports to the European Union dropped 5.7% in the quarter, while those to the U.S. slipped 1.3%. Exports to Southeast Asian economies grew 4%.
Dollar-denominated imports, meanwhile, dropped 1.9% in March, also well short of an estimate of 1.4% growth in the Reuters poll. The drop was mainly caused by softer demand for agricultural products and crude oil. Growth was sustained in major commodities, including mechanical and electrical products.
For the first three months, inbound shipments grew by 1.5%, led by imports from Southeast Asian countries, India and Russia. Imports from the U.S. plunged 10.7%, while those from the EU were down 8%.
The statistics come amid growing Western scrutiny of China’s trade, with the U.S. and Europe complaining that the country’s industrial overcapacity is flooding global markets with cheap products, undercutting their companies. This was a key focus of U.S. Treasury Secretary Janet Yellen’s recent visit to China, and it is expected to come up again when German Chancellor Olaf Scholz visits Beijing in the coming days.
Economists appear to be increasingly divided in their projections for the Chinese economy. On Thursday, Goldman Sachs raised its forecasts for China’s gross domestic product growth to 5.0%, from 4.8% in November, citing busier manufacturing activity.
The Asian Development Bank, however, said weaknesses in China’s economy led by the property market downturn could limit growth in Asia’s developing economies. The Manila-based institutional lender projected China’s GDP growth to slow to 4.8% this year, from 5.2% in 2023.
Ratings agency Fitch this week downgraded China’s sovereign credit outlook to negative, citing debt risks and slowing growth.
sumber: https://asia.nikkei.com/Economy/Trade/China-exports-decline-by-7.5-far-more-than-forecast