China Exports Growth Exceeds Expectations

China’s exports growth exceeded expectations in January to February period, while imports growth moderated more than expected, figures from the General Administration of Customs revealed on Monday.

Exports increased 16.3 percent on a yearly basis, bigger than the expected growth of 15.0 percent. However, this was slower than the 20.9 percent growth logged in December.

At the same time, imports advanced 15.5 percent in January to February, but slower than economists’ forecast of +16.5 percent and December’s 19.5 percent gain.

As a result, the trade surplus rose to $115.9 billion. The surplus was forecast to increase moderately to $99.5 billion from $94.5 billion in December.

Although trade volumes remained strong last month, they are likely to soften over the coming quarters as China’s import-intensive construction sector cools further and rising inflation dampens demand for consumer goods in developed markets, Julian Evans-Pritchard, an economist at Capital Economics, said.

There is not much room for a further rise in export volumes given that ports are already stretched to capacity, the economist noted. Instead, the risks are to the downside.

Further, the war in Ukraine may also result in supply chain disruptions further afield, which could impinge on trade downstream.

The upshot is that net trade will go from being a major prop to economic growth last year to a drag this year, the economist said.

At the last week’s the National People’s Congress, Premier Li Keqiang announced a growth target of around 5.5 percent for 2022, the slowest in three decades. Inflation is estimated to be around 3 percent.

The economy had expanded 8.1 percent in 2021, which was better than the government’s target of above 6 percent.

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