BEIJING (Reuters) - China recorded a $5.35 billion trade surplus in March as import growth eased back from a 13-month peak while exports grew faster than expected, customs data showed on Tuesday.
March data provides the first hard economic numbers of the year not distorted by the impact of Lunar New Year holidays which fell in January this year, causing considerable skew in comparisons with the February 2011 holiday.
The government’s official forecast is for export and import growth to average 10 percent through the course of 2012.
— Exports up 8.9 pct yr/yr (forecast up 7.2 pct) vs. 18.4 pct in Feb
— Imports up 5.3 pct yr/yr (forecast up 9.0 pct) vs. 39.6 pct in Feb
— Trade surplus $5.3 billion (forecast -$1.3 billion ) vs. -$31.5 billion in Feb
“Signs of recovery in demand from the U.S. seem to be positive, although it is too early to say that China is out of the woods with euro zone still in the doldrums.”
“China’s exports grew more than expected at 8.9 percent in spite of (the) high base (effect) while imports rose 5.3 percent, slightly lower than expected. As such, the trade balance moved back to a surplus of $5.3bn earlier than expected.
“We expect the Chinese trade surplus to widen in the second quarter as history shows trade surplus usually widens in the second quarter. However, our cautious on China’s export outlook remains intact due to two reasons. First, global economic outlook remains uncertain. Second, Chinese exporters are facing rising trade protectionism from developed economies.
“China’s current account surplus as percentage of GDP is likely to decline further this year from 2.7 percent in 2011, way below 4 percent threshold proposed by U.S. Treasury Secretary Geithner in 2010. Therefore, fundamental support for the yuan’s rapid appreciation may be fading away, confirming our call for slower renminbi appreciation this year.”
“China’s exports will be stable but weak in 2012 on the assumption that the global economy is on a mild recovery.
“As we all know, Chinese Premier Wen Jiabao has ordered China to import more, and if China’s national purchases increase significantly, it’s still possible for China to report monthly trade deficits.
“For the Chinese yuan, the exchange rate now is quite close to a balanced level, the yuan exchange rate will be more flexible moving in both ways.”
“The trade data looks okay... it shows the global economy is recovering, albeit slowly. Given that China had a trade surplus in the first quarter versus a deficit in the Q1 last year, it indicates a positive contribution to GDP growth. We reckon Q1 GDP growth should be 8.6 percent. I think the market is a bit too pessimistic about China’s economy.”
“March exports are higher than market expectation, thanks to the stronger-than-expected recovery in the U.S. economy since the fourth quarter of last year.
“Import growth last month is a bit weaker, which is in line with other industrial activity data and reflects a slowing demand from the domestic economy.
“We expect the trade surplus to continue into the second quarter, as Chinese factories’ exports in the second quarter typically grow faster than the first quarter.
“But the full-year trade surplus is likely to further narrow down to 100 billion yuan this year.”
DARIUSZ KOWALCZYK, ECONOMIST, CREDIT AGRICOLE CIB, HONG KONG
“The key point is that the export growth was up from 6.8 percent year-on-year in the January-February period. Acceleration in exports may well be slower in volume terms, but the data still highlights the fact that China can continue to count on foreign demand to partly mitigate for weakening domestic demand.
“Q1 saw a $0.7 billion trade surplus, up from the $0.8 billion deficit a year earlier, which suggests that trade may add to Q1 GDP growth. This suggests that the yuan can still be allowed to appreciate a bit as Beijing may be somewhat less concerned about competitiveness of its exporters.”
For details, see the customs website in Chinese, www.customs.gov.cn.
The Shanghai stock market maintained its downward track, off 0.96 percent by 0330 GMT. The Chinese yuan was little changed at 6.307 to the dollar.
— China’s trade surplus narrowed for a third straight year to $155 billion last year, from $183 billion in 2010, $196 billion in 2009 and $296 billion in 2008.
— China aims for its total trade to grow at an average pace of 10 percent in the years between 2011 and 2015, Commerce Ministry Chen Deming said.
— China’s trade surplus as a share of gross domestic product (GDP) dropped to about 2 percent in 2011 from 3.1 percent in 2010, the Commerce Ministry said.
Reporting by Beijing Economics Team; Editing by Nick Edwards