China’s exports slumped in March, dealing a blow to hopes that booming sales abroad will offset weak demand at home and drive growth in the world’s second-largest economy.
Exports shrank 7.5% in dollar terms in March from a year earlier, while imports fell 1.9%, the customs administration said Friday. Both numbers came in well below economist forecasts. The trade surplus for the month was almost $59 billion.
What Bloomberg’s Economists Think…
Early indicators of overseas demand point to some resilience in coming months, which is “a positive for economy but it doesn’t look strong enough to offset weakness in domestic demand.
The surprise decline in imports is also instructive. Policymakers will have to do more heavy lifting to revive demand.”
— Eric Zhu, economist
In manufactured goods including cars and semiconductors — two areas where Western nations are trying to fend off Chinese competition — exports recorded double-digit growth in dollar terms in the first three months of the year. Phone sales declined when measured in dollars, but the actual number of phones shipped overseas rose 6.3% — illustrating how Chinese firms are slashing prices.
Among other products, fertilizer exports led the decline with a 52% plunge in the first quarter from a year ago. That likely reflected Beijing’s effort to secure domestic supplies and stabilize prices. Chinese export prices fell through February, and that deflation means any rise in demand may not translate into higher profits for Chinese firms. Producer prices fell in March for an 18th straight month.
Meanwhile the unexpected drop in imports adds to worries that Chinese consumers, still feeling the impact of an extended real estate slump, have little appetite to spend. Earlier this week, the government reported that consumer prices barely rose in the 12 months through March, highlighting that deflation remains a threat. NN: Well that shoots in the ass any chance of a increase in China oil demand. In fact just the opposite