BEIJING, April 13 (Reuters) – China’s exports rose unexpectedly in March as officials trimmed surging demand for electric vehicles, but analysts warned the improvement partly reflected suppliers catching up on unfulfilled orders after unrest. COVID-19 last year.
Exports in March were up 14.8% from a year ago, after five consecutive months of decline and stunned economists who predicted a 7.0% decline in a Reuters poll.
But analysts say the jump was likely related to exporters scrambling to meet backlogs of orders that have been disrupted by the pandemic in past months, and they warn that the global demand outlook remains weak.
“The wave of coronavirus outbreaks in December and January likely depleted factory inventories. Now that the factories are fully operational, they have absorbed the order backlog from the past,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
“It is unlikely that strong export growth will be sustained given the weak global macro outlook,” he added.
Meanwhile, imports fell less than expected, as economists pointed to an acceleration in purchases of agricultural products, particularly soybeans, providing some support.
Imports fell just 1.4%, below expectations for a 5.0% decline and a 10.2% contraction in the previous two months. Increases in imports of crude oil, iron ore and soybeans in the month were offset by decreases in copper imports.
Financial markets took little cheer from the upbeat export data as investors remained concerned about the outlook, although the Australian dollar, seen as a proxy for Chinese commodity demand, rose slightly.
Lv Daliang, a spokesperson for the General Administration of Customs, attributed the upward surprise to the surge in demand for electric vehicles, solar energy products and lithium batteries.
However, be warned that conditions may get worse in the future.
“The external environment is still harsh and complex at present,” Lv told reporters in Beijing on Thursday. “Slowing external demand and geopolitical factors will bring greater challenges to China’s trade development,” he added.
China’s strong performance contrasts with that of other Asian exporters, such as South Korea and Vietnam, which saw exports decline in the first few months of 2023, contributing to doubts about its viability.
“We are not convinced this recovery will continue given the gloomy outlook for foreign demand,” Capital Economics analysts said in a note.
“We expect most advanced economies to slide into recession this year and we believe the decline in Chinese exports still has some way to go before bottoming out later this year.”
Factory surveys showed a decline in export orders in March, in contrast to more optimistic readings for the services sector, which benefited from China’s reopening.
Newly appointed Chinese Premier Li Qiang said during a cabinet meeting last week that officials should “try every method” to grow trade with advanced economies and push companies to further explore emerging market economies, such as those in Southeast Asia.
Beijing has set a target of growth of around 5% for gross domestic product this year, after tight pandemic controls last year pushed the economy to one of its slowest rates in decades. GDP only increased by 3% last year.
(Reporting by Joe Cash and Elaine Zhang); Editing by Clarence Fernandez and Sam Holmes
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