Although COVID restrictions were lifted, China’s imports fell dramatically in April, while exports rose more slowly. This added pressure to an economy that was already ailing due to slowing global growth.
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Exports increased by 8.5% in the same month following an unexpected increase of 14.8% in March, while imports to the second-largest economy in the world decreased by 7.9% year over year, according to customs figures released on Tuesday.
According to a Reuters poll of economists, imports would not grow and exports would rise by 8.0%. In the aftermath of rising recession threats for several of China’s key trading partners, government officials have frequently warned of a “severe” and “complicated” external environment.
Analysts believe that the Asian powerhouse may face a lengthier path to recovery after Beijing abruptly abandoned severe COVID regulations in December. The reduction in imports is concerning because it shows that domestic demand remains sluggish and may be unable to compensate for an underperforming export engine.
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China’s coal imports dipped in April after reaching a 15-month high the previous month, as demand in the world’s second-largest economy weakened. Copper and natural gas imports were also reduced during the same time period. South Korean exports to China, a leading predictor of Chinese imports, fell 26.5% in April, continuing a 10-month slide.
“The contraction of imports may be partly driven by a slowdown in global demand, which in turn affects China’s imports of parts and components for the processing of exports,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
The most recent official manufacturing purchasing managers’ index for April showed a steep decline in new export orders, highlighting the challenge confronting Chinese authorities and firms looking for a sustained post-COVID economic rebound. After miserably failing to achieve its 2022 aim, the administration has set a moderate GDP growth target of roughly 5% for this year.
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The overall imports and exports of China increased 5.8% annually to 13.32 trillion yuan ($1.94 trillion) in the first four months of 2023, according to figures released on Tuesday by the General Administration of Customs.
Of which, exports increased by 10.6% and imports increased by 0.02 %.
China’s trade with nations taking part in the Belt and Road Initiative increased by 16 percent from January to April, reaching 4.61 trillion yuan.
China’s greatest commercial partner, the Association of Southeast Asian Nations, had its trade with the nation reach 2 trillion yuan between January and April, increasing by 13.9 percent annually and making up 15.7% of the country’s entire value of international trade.