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Chinese exports see surprise 3.5pc jump in April, imports fall

Chinese exports see surprise 3.5pc jump in April, imports fall

BEIJING: China’s exports saw a shock 3.5 per cent rise in April despite the global impact of the coronavirus pandemic, official figures showed on Thursday, partly due to rising medical exports.

But analysts warned of weakness ahead as key markets suffer downturns, as well as the brewing threat of a renewed trade war with the United States.

Imports fell 14.2pc on-year, a steeper drop than last month, according to the Customs Administration.

A forecast of analysts by Bloomberg had predicted an 11pc dive in exports and a 10pc plunge in imports.

Exports of medical instruments and devices rose 11pc in the first four months from a year ago, according to customs data, while most other categories contracted.

ING chief economist for Greater China Iris Pang told AFP that China’s exports of medical supplies provided a boost as the rest of the world grappled with the pandemic.

Pang added that while exports of clothing shrank, sales of textile yarns, fabrics and other products grew, implying they were used to make medical supplies.

Beijing says it has been successful in largely curbing the spread of the virus in the country, and many businesses and factories are now back at work after months of closure.

And Louis Kuijs of Oxford Economics noted that “April shipments may have been boosted by exporters making up for shortfalls in the first quarter due to supply constraints then”.

In the January-February period, the height of China’s coronavirus outbreak, exports plummeted 17.2pc.

In spite of the bounceback — the first return to positive territory for exports this year — analysts do not expect the trend to last as China’s key trading partners fall into recession.

And although the US and China signed a phase one trade pact in their bruising trade war in January, Julian Evans-Pritchard of Capital Economics warned that “the threat of additional US tariffs on Chinese goods shouldn’t be ignored”.

Customs data showed that in April China’s trade surplus with the US widened from a year ago by 8.8pc, to around $22.8bn.

Over the last few months, tensions have ramped up again as the two sides exchanged barbs over the pandemic and its origins, with US President Donald Trump recently threatening new trade tariffs against Beijing.

Nick Marro, global trade lead at The Economist Intelligence Unit, said that it could be hard for both sides to meet earlier commitments.

“Shipments from the US remain well below the levels needed to achieve the purchase pledges under the trade accord... with the deterioration in US-China ties, there’s a risk that the US might act brashly,” he said.

In China — already tackling weak overseas demand and a lingering trade war — virus recovery has been slow.

An independent gauge released Thursday, the Caixin PMI, showed that the services sector is still in contraction and below analyst expectations.

Published in Dawn, May 8th, 2020

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