China’s exports fell 3.5 per cent year-on-year in March, marking a modest rebound for the country’s trade sector after steep falls in January and February owing to the global coronavirus pandemic.
First-quarter exports were down 6.4 per cent year-on-year in renminbi terms, compared with a 15.9 per cent decline in the January-February period, according to data released by China’s customs administration on Tuesday.
The country also recorded a trade surplus of $18.5bn for the month, compared with a deficit of $7.1bn in January and February.
But customs officials struck a cautious note as the pandemic has forced some of China’s biggest export markets in North America and Europe to adopt widespread lockdowns.
“With Covid-19 spreading worldwide, the global economy faces mounting downward pressure,” said Li Kuiwen, a customs spokesperson. “Uncertainties are on the rise and China’s foreign trade is encountering bigger difficulties.”
In February, as the epidemic peaked in China, factories initially struggled to recruit workers and restart operations. Lockdowns and travel bans across the country were gradually lifted in late February and early March, by which time the number of infections in Europe and the US were soaring.
One local official in Guangdong province, who asked not to be identified, said many exporters in his municipality in the Pearl River Delta “currently have almost no orders”.
Julian Evans-Pritchard, senior China economist at Capital Economics, a research consultancy, wrote in a note on Tuesday: “The worst is still to come for China’s export sector. Although supply-side disruptions to factory activity have now eased, foreign demand will slump this quarter as Covid-19 weighs on economic activity outside of China.”
Investors broadly welcomed the news, with stocks rising across the Asia-Pacific region in early afternoon trading. China’s CSI 300 index of Shanghai- and Shenzhen-listed shares were up 0.9 per cent, Japan’s Topix rose 1 per cent and South Korea’s gained 1.5 per cent. Australia’s S&P/ASX 200 rose 0.8 per cent and Hong Kong’s Hang Seng index gained 0.7 per cent.
On Friday the National Bureau of Statistics will release its estimate for first-quarter economic output, which is expected to show the first year-on-year decline in more than 40 years.
Some analysts have projected falls of up to 16 per cent in first-quarter gross domestic product, which would make it almost impossible for the Chinese Communist party to realise its goal of doubling the size of the economy, relative to 2010, by the end of this year.
The government has not released its official economic growth target for the year, which is usually announced in early March at the annual session of China’s parliament. The National People’s Congress meeting was delayed because of the coronavirus pandemic and has not yet been rescheduled.
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While Chinese officials are eager to restore economic growth as soon as possible, they are also wary of a “second wave” of infections as people return to work. On Tuesday, the government reported 89 new confirmed coronavirus cases, almost all of them “imported” by Chinese nationals returning to northeastern Heilongjiang province from Russia.
China’s first-quarter exports to the US fell more than 25 per cent year-on-year to Rmb476.6bn ($67.7bn), but imports were down only 1.3 per cent as the two countries implemented their “phase one” trade deal, which was signed in mid-January.
“Imports of soybeans, pork, cotton and other commodities from the US have grown rapidly,” said Mr Li, who added that overall imports of American agricultural goods had more than doubled compared with the first three months of 2019.
Chinese imports of medical supplies also rose over the first quarter, rising almost 15 per cent year-on-year to Rmb61.9bn.
Additional reporting by Qianer Liu in Shenzhen and Hudson Lockett in Hong Kong