China’s exports likely swung back to contraction in March- Reuters poll

By Thomson Reuters Apr 11, 2024 | 2:15 AM

BEIJING (Reuters) – China’s exports likely declined in March after they grew at a better-than-expected pace in the first two months of this year, a Reuters poll showed on Thursday, highlighting an uneven recovery in the world’s second-biggest economy.

Trade data for March is expected to show outbound shipments shrank 2.3% year-on-year, according to the median forecast of 34 economists, reversing some of the 7.1% increase in the January-February period.

The forecast downturn contrasts with the robust external shipments under the manufacturing purchasing managers’ index (PMI) surveys for last month, but reinforce analysts’ expectation for overall China exports growth to pull back materially due to the higher year-ago base comparison.

“The deadweight tonnage of ships in 20 major ports (including both arrival and departure) declined 6.2% year-on-year in March 1-30,” a Citi note said earlier this month.

Exports unexpectedly surged in March last year, but the customs administration revised down the value of March exports by a wide margin later in 2023.

The nation’s exporters faced a tough period for much of last year due to soft overseas demand and tight global monetary policy.

China’s economy got off to a relatively solid start this year after policymakers rolled out support measures to revive household consumption, private investment and market confidence since the second half of 2023.

Yet, growth in the Asian giant remains uneven and analysts don’t expect a full-blown revival anytime soon mainly due to a protracted property sector crisis.

Official data also showed on Thursday consumer inflation had cooled more than expected in March, pointing to the sluggish demand conditions.

Analysts also say Western concerns over China’s overcapacity in some industries may bring more trade barriers for the world’s manufacturing hub.

China’s imports likely increased 1.4% in March, according to the poll, slower than the 3.5% gain in the first two months combined.

South Korean exports in that same month to China, a leading indicator of China’s imports, rose 0.4% from a year earlier, improving from a 2.4% fall in February. Overall, the Korean data shows that Chinese domestic demand remains tepid.

The median estimate in the poll predicted China’s trade surplus will come in at $70.2 billion.

The data will be released on Friday.

(Polling by Milounee Purohit and Anant Chandak in Bengaluru and Jing Wang in Shanghai; Reporting by Ellen Zhang and Kevin Yao; Editing by Shri Navaratnam)