China Exports Beat Forecasts, But Skepticism Prevails
China's exports and imports grew more than expected in April from a year earlier, possibly easing some of the concerns about weakness in the recovery of the world's second-largest economy, though doubts remained over the strength of real demand and the accuracy of the figures.
China's exports rose 14.7 percent in April, while imports grew 16.8 percent, leaving the country with a trade surplus of $18.16 billion for the month, the Customs Administration said on Wednesday.
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That compared with market expectations for a 10.3 percent rise in exports, a 13.9 percent increase in imports and a trade surplus of $15.1 billion. From a month earlier, exports edged up 2.7 percent while imports fell 7.7 percent.
Chinese export data in recent months has seemed to signal to a gradual revival of external demand, though some analysts suspect exporters may have overstated their business to sneak funds into the country and avoid capital restrictions.
"I have no strong conviction whether the data reflects reality. We'll focus on next Monday's activities data," said Zhiwei Zhang, chief China economist at Nomura in Hong Kong.
"China's SAFE recently launched new rules to crack down against capital inflows disguised as trade payments. I'm suspicious about the trade data," Zhang said, referring to the State Administration of Foreign Exchange.
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The regulator released new rules on Sunday tightening limits on yuan positions that banks can hold as part of a campaign to crack down on hot money inflows.
Adding to the concerns over the data, a pair of PMI surveys last week showed growth in China's vast factory sector eased in April as new export orders shrank, offering new signs of a delay in the economic recovery.
China's robust growth figures come after major Asian exporters South Korea and Taiwan posted weaker-than-expected exports for April, showing the fragility of global demand.
Although the United States posted firm jobs numbers for April, they followed a series of weak data, while the recession-hit euro zone has record unemployment.
Weakness has spread to the services sector, where a separate private PMI survey showed growth slowed sharply in April to its weakest pace since August 2011, adding to the risk that China's economic growth is weaker than previously anticipated.
China's economy unexpectedly stumbled in the first quarter, growing 7.7 percent from a year earlier versus a rise of 7.9 percent in the previous three months, as factory output and investment slowed. Analysts had expected growth to pick up in the first quarter.
A Reuters poll in April had forecast second-quarter annual growth of 8.00 percent.
To be sure, most economists expect a steady and gentle economic recovery this year, as investment growth quickens and retail sales stabilize from the second quarter onwards as government policies to stimulate growth kick in.