China Economy

China's exports, imports fell in March but not as much as expected

Key Points
  • China's exports fell 6.6% in March from a year ago, while imports slipped 0.9% in the same month, data from the General Administration of Customs showed on Tuesday.
  • Economists polled by Reuters had expected exports from China to fall 14% in March from a year ago, while imports were projected to fall 9.5% over the same period.
  • The country's March trade surplus was $19.9 billion, as compared to the $18.55 billion that economists polled by Reuters had expected.
VIDEO3:2503:25
Weakening global demand for Chinese exports poses challenge to a V-shaped recovery

China reported that its dollar-denominated exports and imports both fell from a year ago in March, but they were better than what economists had expected.

China's exports fell 6.6% in March from a year ago, while imports slipped 0.9% in the same month, data from the General Administration of Customs showed on Tuesday.

Economists polled by Reuters had expected exports from China to fall 14% in March from a year ago, while imports were projected to fall 9.5% over the same period.

The country's March trade surplus was $19.9 billion, as compared with the $18.55 billion that economists polled by Reuters had expected.

Earlier this year, China reported combined trade data for the months of January and February.

Over the two months, exports fell 17.2% from a year ago while imports fell 4% as the coronavirus outbreak put the brakes on the world's second largest economy.

China's trade surplus with the U.S. narrowed to $15.32 billion in March from $25.37 billion in January and February, according to Reuters calculations.

The China-U.S. phase one trade agreement is gradually being implemented, said Li Kuiwen, spokesperson for the General Administration of Customs, according to a CNBC translation of his Mandarin-language remarks at a press conference.

While the outbreak appears to have abated in China recently, it remains a serious situation in the rest of the world. Global cases of Covid-19 hovered near 2 million on Tuesday.

In order to contain the coronavirus, many countries have locked down vast populations, disrupting supply chains and straining economies, causing shocks on both the supply and demand fronts.

Li said there are difficulties in foreign trade, Reuters reported. Shrinking international demand will hit China's exports, even as recovering domestic demand lends support to the country's economy, Li said.

"A sort of V-shaped rebound of the Chinese economy is being challenged because of the second round feedback response from the weakening of global demand on Chinese exports, and hence the Chinese manufacturing sector," said Chi Lo, senior economist for Greater China at BNP Paribas Asset Management.

Purchasing Managers' Index readings released earlier for the month of March showed manufacturing activity expanded but that was compared with severe contractions in February. Analysts caution that there are still headwinds from the global pandemic.

While a 10 percentage point export contraction would not significantly affect China's economy, Lo told CNBC's Street Signs that a high double-digit percentage point contraction would be material. That could pull the economy's on-year growth rate down by two to three percentage points "easily," Lo said.

The public health emergency has wiped out trillions from stock markets and knocked the wind out of many economies. Governments worldwide are announcing stimulus packages to pull their nations through the crisis.

— CNBC's Evelyn Cheng contributed to this report.