China’s exports and imports rebound in April, signaling strengthening demand

After a 7.5% decline in March, exports rebounded with a 1.5% growth compared to the previous year. Meanwhile, imports surged by 8.4% in April, surpassing analysts’ expectations and marking a significant improvement from the 1.9% decline in March.

The expansion in trade comes amidst a backdrop of various policy support measures implemented by China in recent months to stimulate growth and bolster confidence in its economy. The trade surplus widened to $72.35 billion in April, up from $58.55 billion in March.

While the data presents a positive outlook, analysts caution against overly optimistic projections, citing global economic trends. Zichun Huang of Capital Economics notes that the growth in exports may be attributed to a lower base of comparison from the previous year, while import volumes are expected to rise further due to fiscal spending supporting import-heavy construction projects.

The Association of Southeast Asian Nations (ASEAN) remains a significant market for China’s exports, comprising 16.9% of total exports in the first four months of the year. However, exports to key markets such as the U.S. and the European Union saw declines of 1.6% and 3.3% respectively in April compared to the previous year.

Lynn Song, an economist at ING Economics, emphasizes the resilience of import demand but suggests that exports could face greater risks in the coming months, leading to a reduced contribution from trade to overall economic growth in the second quarter.

China continues to grapple with the aftermath of the COVID-19 pandemic, compounded by weaker global demand and challenges in its property sector. To achieve its growth target of around 5% for the year, economists argue that China will require further policy support measures.