China's exports up 0.9 pct in April

China's foreign trade did surprisingly well in April due to more central policy support and exports to developed markets.

Exports went up 0.9 percent year on year to 188.54 billion U.S. dollars, imports were up 0.8 percent to 170.09 billion U.S. dollars and total foreign trade volume increased 0.8 percent to 358.63 billion U.S. dollars, the General Administration of Customs (GAC) said.

Trade balance surplus stood at 18.45 billion U.S. dollars in April, up 1.8 percent year on year.

Yuan-denominated customs data offered a different picture, showing exports dropping 1.4 percent to 1.16 trillion yuan and imports losing 1.3 percent to 1.04 trillion yuan.

GAC spokesman Zheng Yuesheng explained that the yuan-dollar conversion is based on an exchange rate determined by the forex regulator for statistical purposes, with monthly changes leading to different results in the two currencies. Over 80 percent of the customs declarations were U.S. dollar-denominated, converted to yuan.

Observers and analysts will, over time, get used to thinking about China's external trade data in yuan terms, according to Louis Kuijs, an economist with the Royal Bank of Scotland.

This year's January trade figures were the first use of the yuan, rather than talking purely in terms of U.S. dollars.

"In our view, this is in line with the internationalization of the yuan, and what we see in other large economies," noted Kuijs.

Export growth for the same period last year was inflated due to over-invoicing, which distorted trade numbers and, at the time, was a bet on yuan appreciation. Authorities have since clamped down on over-invoicing, and the yuan has depreciated by nearly 3.5 percent this year.

"Previous over-invoicing has made export growth in early 2014 look significantly worse than it really was", noted Kuijs. Bank of America Merrill Lynch (BAML) calculated actual export growth of around 10 percent in April, adjusted for distortion.

China's numbers follow strong trade data from the Republic of Korea and Taiwan, two neighboring export oriented economies, suggesting an acceleration of global demand. Taiwan on Wednesday reported a 6.2 percent year on year growth for April, more than three times growth in March. South Korea's exports rose 9 percent in April - the most in 15 months - from 5.1 percent in March.

Taken together, Asia's imports are improving, because "better than expected export growth is supported by better export demand in the developed market", according to BAML research.

Thursday's GAC data revealed that the first four months saw a year on year decline of 0.5 percent in foreign trade volume to 1.32 trillion U.S. dollars, according to the GAC data.

Long Guoqiang, economist with the Development Research Center of the State Council, said the April foreign trade figures rebounded through policy support and improving exports to major countries.

Trade with the EU, the U.S., Japan and ASEAN rose 8.5 percent, 2.4 percent, 1.6 percent and 1.2 percent respectively in the first four months.

Trade between with emerging markets has been hit by financial turbulence since the second half of 2013 and needs to become more efficient, adding more value as more developing countries strive for export oriented development.

Haibin Zhu, Chief Economist with J.P. Morgan China, agreed that shipments to developed markets, especially the U.S. and Europe, led the rise in April exports.

He forecast that a constructive global growth picture in coming quarters will support gradual improvement in China's exports.