China April export growth seen edging up from low base


China's annual export growth may have picked up slightly in April due to a low comparison from a year ago, while import growth probably eased, a Reuters poll showed, suggesting the underlying momentum for both the domestic and global economies remains tepid.

Economists said the likely uptick in the year-on-year export figure cannot mask weakness in real external demand, given the patchy recovery in the U.S. and no quick turnaround for the euro zone.

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"Recent data including Korea's exports data and global leading indicators have been indicating weaker external demand growth momentum," said Yu Song, China economist at Goldman Sachs, in a note to clients.

"We expect the sequential exports growth rate to be low. However, year-on-year growth is likely to show a modest rebound, due to a low base," he added.

The median forecast of 27 economists polled by Reuters showed China's exports likely grew 10.3 percent in April from a year ago, up from an increase of 10 percent in March.

Imports were seen rising 13.9 percent last month, down from a rise of 14.1 percent in March.

That would leave an estimated trade surplus of $15.1 billion, compared with a slight trade deficit of $0.88 billion in March.

Recent soft export data from South Korea and Taiwan have highlighted faltering overseas demand and sparked concerns that Asia's export-reliant economies could lose further steam in the coming quarters.

Exports from South Korea, a big supplier to the global tech industry, grew by a scant and well-below-forecast 0.4 percent in April from a year earlier, which could signal weak exports for other countries in the region.

A pair of PMI surveys last week showed the growth of China's vast factory sector eased in April as new export orders shrank, offering new signs of a delayed economic recovery.

China's exports had staged a higher-than-expected rebound in the first quarter, which some analysts said was distorted by speculative capital inflows in the guise of trade transactions betting on appreciation of the yuan currency to avoid capital restrictions.

But analysts said the spurt in export data was unlikely to be sustained in the coming months and export growth may start to trend down from the second quarter.

"With a narrowed CNY-CNH spread and tightened customs supervision on export reporting, export growth will likely fall from the artificially high numbers in 1Q," said Ting Lu, China economist at Bank of America Merrill Lynch in Hong Kong, referring to the differential between onshore and offshore yuan prices.

China's top foreign exchange regulator said on Sunday that it would increase scrutiny on exporters which channel in money disguised as trade bills.

Economists said China's import growth largely hinges on the pace of revival in the domestic demand, which was recently crimped by the government's frugality campaign and a slower-than-expected upturn in investment growth.

China's economy unexpectedly stumbled in the first quarter, growing 7.7 percent from a year ago versus a rise of 7.9 percent in the previous three months, as factory output and investment slowed.

Despite some short-term downside risks, most economists still expect a steady and gentle recovery this year, as investment growth is seen to quicken and retail sales to stabilize from the second quarter onwards.

In addition, Beijing's push for a nationwide urbanization program to help refine the economic structure will eventually reinforce the economy's internal strength and push up import growth in the longer term.

Other major data later this week is expected to show subdued factory and investment growth probably capped China's inflation in April and depressed producer prices for the 14th consecutive month, showed, further clouding the outlook for the economy.

(exports and imports in pct y/y; balance in $billion)


Exports Imports Trade balance

ANZ 8.1 13.2 12.4

Bank of Communications 12.0 13.0 19.0

Barclays 8.5 10.0 N/A

BofAML 8.0 6.0 22.8

Capital Economics 15.0 20.0 14.0

Changjiang Securities 7.8 15.0 N/A

China Construction Bank 10.2 13.9 15.0

CICC 12.0 15.0 16.4

Citi 7.0 9.2 16.5

Daiwa Capital Markets 7.1 11.2 13.8

Deutsche Bank 13.0 17.0 15.1

Everbright Securities 11.6 13.0 18.8

Goldman Sachs 11.0 17.0 11.9

Forecast 14.8 15.5 23.0

Haitong Securities 14.1 28.1 1.1

Huarong Securities 8.9 13.2 15.6

Hwabao Trust 13.4 14.2 20.0

Industrial Bank 13.5 25.0 5.0

Merchant Securities 12.3 18.1 12.3

Mizuho Securities 11.0 16.0 13.2

Morgan Stanley 9.0 11.0 N/A

OCBC 11.0 12.6 18.2

Peking First Advisory 5.1 2.0 23.9

Shanghai Securities 10.3 17.4 10.0

Shenyin & Wanguo 9.2 10.6 18.1

Standard Chartered 8.0 12.0 2.0

Zheshang Securities 10.2 14.2 14.0


Median 10.3 13.9 15.1

Highest 15.0 28.1 23.9

Lowest 5.1 2.0 1.1

Prior 10.0 14.1 -0.88

> For more stories on China's economy > More previews on upcoming major data > China's economic indicator calendar and polls

(Reporting by China Economics Team; Writing by Aileen Wang; Editing by Jonathan Standing & Kim Coghill)