China: Trade prospects remain firm – UOB

Economist at UOB Group Ho Woei Chen, CFA, assesses the latest trade data in the Chinese economy.

Key Quotes

“China’s export and import growth accelerated in April as external economic outlook continues to improve while commodity prices sustain their upward trajectory. In USDterms, exports surged 32.3% y/y (Bloomberg est: +24.1% y/y; Mar: 30.6% y/y) up from the preceding month and was significantly above consensus expectation, despite the diminishing low base effect and thus is a stronger indicator of a robust external demand. Imports grew at its fastest pace in more than a decade at 43.1% y/y (Bloomberg est: +44.0% y/y; Mar: 38.1% y/y), helped by rebounding commodity prices as well as a low comparison base. China’s trade surplus widened to US$42.85 bn in April from US$13.80 bn in March, its highest in three months.”

“Despite ongoing trade tensions, exports and imports with the US remained robust at 31.2% y/y and 51.7% y/y in April. China’s strong imports of soy beans at 53.8% y/y likely suggests further efforts to increase its purchases from the US. China’s trade surplus with the US rose to US$28.11 bn in April from US$21.37 bn in March. Year-to-date, the trade surplus was at US$100.74 bn, higher compared to US$63.60 in the year-ago period. We expect China’s trade surplus with US to widen this year as the US economy strengthens.”