China's exports grew by 8.5% in April compared to a year earlier, marking the second consecutive month of growth and exceeding economists' expectations. Meanwhile, imports fell by 7.9% last month, according to data released on Tuesday.
Economists polled by Reuters had estimated that exports would rise by 8%, while imports were forecasted to remain unchanged. However, The National Bureau of Statistics' manufacturing purchasing manager's index reading for April missed expectations and fell into contraction territory with a score of 49.2 from March's reading of 51.9.
Goldman Sachs economists expect "the dissipation of this seasonal bias to slow export growth in April," but they maintained their forecast for China's economy to achieve full-year growth of 6% in 2023.
The increase in exports indicates continued strong global demand despite concerns about high interest rates and slowing economic growth rates worldwide. In US dollar terms, exports expanded by an impressive rate—8.5% from a year earlier—while imports declined at a rate of roughly -7%, leaving a trade surplus totaling $90 billion for the month.
Economists surveyed by Bloomberg predicted that exports would grow at around the same pace (about +8%), while import figures were expected to fall only slightly (-0.2%). The export numbers performed well when compared against last year; during lockdowns caused major manufacturing areas surrounding Shanghai shut down temporarily as companies struggled to get goods through port closures due to Covid-19 restrictions.
China’s record-breaking export levels are not anticipated to hold steady throughout next year as rising prices and interest rates combine with high inventory levels and ongoing conflict within Ukraine which collectively act as brakes on consumer demand globally.
Customs data showed that yuan-denominated Chinese exports remained robust in April: growing at an astounding rate (+16.8%) over the same period in previous years, while imports decreased by a mere -0.8%.
"The data indicates that China's export sector continues to perform well despite global headwinds," said Li Wei, Chief Economist at Standard Chartered Bank. "However, we need to monitor the situation closely as external factors such as high interest rates and geopolitical tensions could affect trade going forward."