China’s exports and imports rose less than estimated in April, adding pressure on the government to ease policies to spur expansion.
Overseas shipments rose 4.9 percent from a year earlier, the customs bureau said on its website today. That compares with the 8.5 percent median estimate in a Bloomberg News survey of 33 analysts. Import growth of 0.3 percent trailed forecasts for a 10.9 percent gain. The trade surplus was $18.4 billion, almost double estimates of $9.9 billion.
Gains in the yuan against the dollar have ground to a halt this year as the Chinese government argues that the currency is near “equilibrium” and austerity measures in Europe weigh on export demand. Leaders have pledged to cut the economy’s reliance on overseas sales and reduce controls on capital flows.
“The European weakness will continue to weigh on China’s export growth in the coming months,” Zhang Zhiwei, chief China economist for Nomura Holdings Inc. in Hong Kong, said before the report. Imports will be “well supported” by domestic income growth and measures including lower tariffs on inbound shipments, he said.
China may have to loosen policies further as the export outlook remains “weak,” with a potential cut in banks’ reserve requirements this month and an increase in fiscal spending during the quarter, Zhang said. Pressure for yuan appreciation will be limited by an anticipated narrowing in the trade surplus, he said.
The Shanghai Composite Index pared gains, rising less than 0.1 percent as of 11:11 a.m. local time. The gauge traded as much as 0.4 percent higher earlier today.
Export orders signed at the Canton Fair, a trade show in the southern city of Guangzhou that ran from mid-April to May 5, fell 2.3 percent from a year earlier, the first decline for the semiannual event’s spring exhibition since 2009.
The decline may prompt the government to cut banks’ reserve requirements and boost the construction of low-income housing and funding for infrastructure projects, Bank of America Corp. economists Lu Ting and Hu Weijun said in a note May 7.
Chinese imports rose 5.3 percent in March while exports increased 8.9 percent from a year earlier, leaving a trade surplus of $5.35 billion. The nation reported a trade deficit of $31.5 billion in February, its first shortfall in a year and the biggest since at least 1989, as Europe’s debt crisis crimped exports.
The trade surplus was $11.4 billion in April 2011.
China’s trade this year is more balanced than in 2011, Xinhua News Agency reported May 8, citing Commerce Minister Chen Deming. The trade surplus accounted for 2.8 percent of gross domestic product in the first few months of this year, he said at a meeting in Jiangsu province on May 7, according to the report.
LG Chem Ltd., South Korea’s biggest chemicals maker, last month reported a worse-than-estimated 42 percent decline in first-quarter profit as demand in China waned for materials used to make plastic and synthetic rubber.