China’s exports seen rising in April but at slower pace, outlook challenging

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Containers and cargo vessels at the Qingdao port

By Joe Cash

BEIJING (Reuters) -China’s exports were expected to have risen again in April, albeit at a less robust pace than a month earlier, a Reuters poll showed, supported by unfulfilled orders after last year’s COVID disruptions though slowing global growth is darkening the outlook.

Outbound shipments last month from the world’s second largest economy is expected to show growth of 8.0% year-on-year, following an unexpected surge of 14.8% in March, according to the median forecast of 27 economists in the poll finalised on Monday.

Imports are still expected to paint a less favourable picture of the overall economy, with economists predicting no growth, similar to April, 2022, after falling by 1.4% year-on-year in March.

The trade data will be released on Tuesday.

With many of China’s major trade partners on the brink of recession, analysts remain wary about the outlook, noting that the stunning improvement in March partly reflects suppliers catching up with unfulfilled orders from last year’s COVID disruptions.

The cautious stance was backed by the recent official manufacturing purchasing managers’ index for April showing new export orders contracting sharply and underlining the challenge facing Chinese policymakers and businesses hoping for a robust post-COVID economic recovery.

“We believe March’s 14.8% year on year growth is unsustainable and monthly export growth may drop to low single-digit or even into negative territory again,” Ting Lu, chief China economist at Nomura, wrote in a note, citing a slowing global economy and rising geopolitical tensions.

South Korean exports to China, a leading indicator of China’s imports, were down 26.5% in April, continuing 10 consecutive months of decline.

China’s economy grew faster than expected in the first quarter thanks to robust services consumption, but factory output has lagged amid weak global growth. Property market weakness, slowing prices and surging bank savings are raising doubts about demand.

The government has set a modest GDP growth target of around 5% for this year, after badly missing the 2022 goal.

(Reporting by Joe Cash; Polling by Sujith Pai and Devayani Sathyan in Bengaluru; Editing by Shri Navaratnam)

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