Chinese exports staged a massive turnaround in March and, together with continued elevated imports of resources to feed the country’s rebounding industrial sector, catapulted the overall foreign trade sector to its fastest growth for a first quarter in six years.
Exports for the month jumped 16.4% from a year earlier, trouncing the modest 4.3% gain forecast in a Bloomberg poll of analysts, and the yet more modest 3.2% prediction from a similar Reuters survey.
Shipments to China’s neighbors led the charge, with South Korea, Southeast Asia and Taiwan recording the strongest quarterly growth. Electrical and mechanical products took a 58.1% share of total exports, with demand rising 15.1%. Sales of mobile phones jumped 21.1% , substantially higher than the overall 8.2% expansion in the quarter.
The first quarter data suggest “China has finally caught up with the rest of Asia with the end of the trade recession,” Raymond Yeung, chief greater China economist at ANZ Bank told Bloomberg. “Given the meeting and phone call between Xi and Trump, the risk of a trade war has diminished substantially.”
March imports soared 20.3%, with the Bloomberg poll again missing the mark with its 15.5% forecast — Reuters’ pundits made a better showing here, with their tip of 18.0%.
Crude oil imports jumped 20% to a record 38.95 million metric tons, almost 3 million tons more than the previous high in December. The nation’s oil bill hit US$15.4 billion for the month, about 10% of the import total.
Purchases of iron ore also came to within a whisker of a new high at 95.56 million tons, less than a million tons away from January 2016’s record.
While imports of the raw material used to make steel rose 11% in volume terms from a year ago, they more than doubled in value. The biggest winner from the March numbers? Australia, which saw its exports to China jump almost 75%.
“Rising prices don’t just push up the total cost of imports, but also have an impact on domestic production,” Huang Songping, a spokesman for the General Administration of Customs, said at a press conference. “This would also feed through into higher export prices.”
The strong, yet balanced expansion in foreign trade came after February’s more skewed growth, which saw imports surging 38.1% while exports contracted 1.3%, pitching the nation into an unexpected US$9.15 billion deficit.
Overall, the trade balance returned to a surplus of US$23.93 billion in March, almost double Bloomberg’s median estimate of US$12.5 billion. The surplus for the quarter was US$65.61 billion.
However, Huang cautioned that with today’s figures coming off a low base of comparison, growth may edge lower going into the second quarter.