China reports stronger April trade growth

Graphic showing China’s trade balance, with a surplus in April of $18.2 billion according to Customs authorities Wednesday. AFP

BEIJING — China’s trade accelerated in April in a possible positive sign for its shaky economic recovery.

Exports rose 14.7 percent over a year earlier, up from March’s 10 percent growth, customs data showed Tuesday. Imports gained 16.8 percent, up from the previous month’s 14.1 percent.

The stronger data suggest growth of the world’s second-largest economy might be improving after an unexpected decline to 7.7 percent in the first three months of the year from the previous quarter’s 7.9 percent.

“Subdued actual export growth in April points to sluggish global demand,” said RBS economists Louis Kuijs and Tiffany Qiu in a report. “Reasonable import growth suggests domestic demand has held up better so far.”

Some analysts suggest Chinese trade data are distorted by reporting errors and unreliable as an economic indicator. Still, April’s stronger numbers might help to reassure companies and investors after the weaker first-quarter growth jolted global financial markets.

Surveys by HSBC Corp. and a Chinese industry group showed Chinese manufacturing growth weakened in April. HSBC said new export orders fell for the first time this year.

Some analysts have warned China’s recovery is being shored up by state-led investment and bank lending and could be vulnerable if trade or investment weakens. The weaker-than-expected first quarter numbers prompted the World Bank and private sector analysts to trim forecasts for full-year growth, though to still robust levels of about 8 percent.

Chinese leaders are trying to nurture self-sustaining growth driven by domestic consumption instead of trade and investment. But consumer spending is growing more slowly than they want.

A Cabinet statement last month promised to improve the role of consumption as a driver of economic growth. It pledged changes in medical, pension and other policies but gave no details. Analysts say more government spending on such social programs will be required to free up household budgets for consumer spending.

April’s stronger gains in imports compared with exports caused China’s global trade surplus to narrow by about 1 percent, though to a still-wide $18.2 billion.

China runs a deficit with most of its trading partners, which supply oil, other raw materials and industrial components, and makes up for it by running large surpluses with its U.S. and European export markets.

China’s exports to Europe, hurt by the continent’s debt troubles, declined 6.5 percent to $25.9 billion and the surplus with the 27-nation European Union narrowed by 32 percent to $7.9 billion.

Trade with some European countries suffered even bigger declines. Germany’s imports of Chinese goods fell 7.2 percent and France’s by 6.7 percent.

Exports to the United States edged down by a fraction of 1 percent to $28.1 billion while the trade gap with the U.S. narrowed by 13 percent to $14.7 billion.

China’s data on exports have been under scrutiny since some analysts pointed out last year they showed they failed to match up with its trading partners’ lower figures for their purchases of Chinese goods.

Some analysts suggested Chinese exporters might be inflating values on customs declarations as a way to evade Beijing’s currency controls and bring money into the country for investment.

Kuijs and Qiu of RBS said that after factoring out irregularities, they estimated China’s exports rose only by about 5.7 percent in April, about 9 percentage points lower than the reported level. They said they saw no obvious irregularities in import data and no reason to inflate the values of goods.