China's Trade Surplus Increases in April

By Mark MagnierFeaturesDow Jones Newswires

China's trade surplus widened in April, though both exports and imports grew less than expected amid signs that global trade momentum may be slipping.

Exports rose 8% from a year earlier compared with 16.4% in March, the General Administration of Customs said Monday. Economists polled by The Wall Street Journal had forecast a 10% rise.

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Imports climbed 11.9%, also below forecasts, after a 20.3% rise in March. China's trade surplus increased to $38.05 billion from $23.93 billion the previous month.

China's trade surplus has been a point of contention with the U.S. Since the early-April summit between Presidents Donald Trump and Xi Jinping in Florida, trade tensions have eased, reducing the prospect for punitive U.S. tariffs on Chinese goods.

"Overall, China's exports were weaker than expected, but they're still OK," said Macquarie Group Ltd. economist Larry Hu. "External demand will be better than last year, but it's likely to slow down for the rest of the year."

The April data comes on the heels of China's strong export figures for March, when shipments delayed by the January-February Lunar New Year holiday rebounded.

China's exports have picked up steam this year after lagging behind trade recoveries in South Korea and Taiwan. China's exports to North America, Europe and Japan were up between 7% and 11% year on year in dollar terms in the first four months of 2017.

But economists question how much further Chinese exports can expand given evidence of weaker demand in developed countries. The U.S. Institute for Supply Management manufacturing purchasing managers index and Germany's Ifo institute's business confidence index slipped last month, while the U.S. economy quarter grew in the first quarter at its slowest pace in three years as consumers reined in spending.

"This could be an early sign of more deceleration in the global trade recovery," said Nordea Bank analyst Amy Yuan Zhuang. "Trade will continue to improve this year but not as much as people expect. I think this is as good as it gets."

Even at a reduced pace, however, exports are expected to contribute to growth in the world's second-largest economy this year as demand for technology products expands in the U.S. and Europe. This contrasts with last year, when a decline in exports subtracted 0.5 percentage point from China's economic growth.

Grandware Industrial Co., based in Shanghai, which sells glass tableware to North America, said its export prospects are solid, with sales expected to increase by 10% to 20% this year over 2016 levels. Higher raw-material prices in the first quarter prompted the company to raise prices, which resulted in some lost orders, but the political situation appears to have improved, said Cai Qihua, Grandware's general manager.

"Exports should continue to grow steadily this year," Mr. Cai said, adding that he sees less of a threat of higher U.S. import tariffs on Chinese goods, a possibility Mr. Trump has mentioned.

Chinese imports decelerated in April, partly as a result of falling commodity prices capped by a sharp drop in iron-ore, oil and coking-coal prices in recent weeks. Economists said they expect further reductions in raw-material imports amid expectations of a slowdown in China's housing market later in the year.

China remained the world's largest exporter in 2016 for the eighth consecutive year, accounting for 13% of the global total even as exports become a less-important growth driver for the country. Exports accounted for 18% of China's economy last year, down from a peak above 32% in 2006.

Grace Zhu and Liyan Qi contributed to this article.

Write to Mark Magnier at

(END) Dow Jones Newswires

May 08, 2017 02:25 ET (06:25 GMT)