China: imports fall and exports slow down – 09/05/2023 – Market

China’s imports contracted sharply in April while exports rose at a slower pace, reinforcing signs of sluggish domestic demand despite the end of Covid restrictions and adding pressure to an economy already struggling as growth slows. global.

Imports from the world’s second-largest economy fell 7.9% in April from a year earlier, extending the 1.4% decline seen in the previous month.

Exports, on the other hand, grew 8.5%, losing strength in relation to the 14.8% increase seen in March, customs data showed this Tuesday (9).

Economists in a Reuters poll had forecast stagnant imports and an 8.0% rise in exports.

“At the beginning of this year, it was assumed that imports would easily surpass 2022 levels after reopening, but that is not the case,” said Xu Tianchen, an economist at the Economist Intelligence Unit.

“While China’s post-Covid recovery has been swift and sharp, it has been largely contained and not felt by the rest of the world,” he added.

Government officials have repeatedly warned of a “serious” and “complicated” external environment in the wake of rising recession risks for many of the Asian giant’s main trading partners.

The contraction in imports suggests that the world economy will not be able to rely heavily on China’s domestic growth engine and, as the country re-exports some of its imports, it also reinforces the extent of weakness in some of its main trading partner economies.

A drop of 15.3% in semiconductor imports indicates the scale of the demand retraction in the re-export market for these parts.

Analysts say the strong global monetary policy tightening campaign of the last 12 to 18 months and the recent Western banking stress continue to worry China’s and global recovery prospects.