Containers and trucks at Qingdao Port, China, on February 14, 2019.
Reuters
BEIJING – China’s economy was boosted by strong exports last year, but that momentum is waning.
The country’s customs agency said on Tuesday that, in dollars, exports rose 30.6% in March from a year ago, without expecting 35.5% growth.
Looking ahead to the next three months, customs spokesman Li Kuiwen told reporters that last year’s high base poses challenges for trade in the second quarter. In addition, Li said that the resurgence of Covid-19 cases and uncertainties abroad, such as the blockade of the Suez Canal, mean that China still has a long way to go to achieve stable trade growth. .
The Chinese authorities would like to shift the dependence of the economy from private consumption for growth and move away from the manufacture of goods for export. But the category still plays an important role in the economy as a whole. Last year, Chinese factories were able to resume production much earlier than those in other countries still struggling with the pandemic.
Domestic exports rose 3.6% last year, while the country’s GDP grew 2.3%, being the only major economy to expand amid the pandemic. Much of the growth in exports last year came from increased demand for face masks and other protective equipment.
China’s early emergence of the pandemic and overseas stimulus have spurred the purchase of products made by Chinese factories, noted Larry Hu, China’s chief economist at Macquarie.
“These two factors will (fade away) the rest of this year as other countries reopen and consumers can spend more on services,” he said in an email on Tuesday. “So I don’t think the current pace can keep up.”
The 30.6% increase in March exports is on a low basis. China’s exports fell 13.6% in the first quarter of last year amid a 6.8% contraction in GDP, according to data accessed through Wind Information.
Nomura analysts expect export growth to slow from 10% to 15% in April, with a more significant slowdown in the second half of the year.
International e-commerce
In another sign of limits on trade’s ability to contribute to national growth, cross-border e-commerce between China and other countries showed muted performance during the first quarter.
The new Internet-driven trend contributed 419.5 billion yuan ($ 64.5 billion) to trade during the first three months of the year. This accounted for just under 5% of China’s trade during that time; little changed from the ratio of almost 5.3% last year.
Although the figures for the first quarter grew by 46.5% compared to a reduced base a year ago, the value of cross-border e-commerce e-commerce during the first three months of the year was lower than quarterly average of 422.5 billion yuan last year.
“The proportion of cross-border e-commerce remains low (showing) the limits it has to contribute to imports and exports and the economy as a whole,” said Bruce Pang, head of macro research and strategy at China Renaissance. According to a CNBC translation of his statement in Chinese.
He hopes the Chinese authorities will focus on expanding domestic demand and the local market, as a way to protect themselves from possible fluctuations in foreign trade.
Imports rose 38.1% higher than expected in March.
China will release first-quarter GDP figures on Friday. January and February data are often distorted by the Spring Festival, the largest holiday of the year in the country.