Export uptick a 'warming' trend

Containers pile up at Waigaoqiao Port in the Shanghai Free Trade Zone. [Photo/ Xinhua]

China's exports and imports improved modestly in April as trade-related reforms began to show results, easing pressure on the growth of the world's second-largest economy.

Exports edged up 0.9 percent year-on-year to $188.54 billion, compared with a 6.6 percent drop in March. Imports rose 0.8 percent after slumping 11.3 percent in the previous month, the General Administration of Customs said on Thursday.

Total trade expanded 0.8 percent, compared with a first-quarter decline of 1 percent.

Exports improved last month in spite of a high year-earlier base caused by fake invoicing, which allowed individuals and companies in China to evade regulations on currency flows. Authorities cracked down on that practice in the middle of 2013.

China's economic growth will probably stabilize in the coming months as a result of the improvement of exports, analysts said. "Exports may have touched bottom earlier this year and will keep warming up," said Yang Weixiao, a senior analyst at Lianxun Securities Co Ltd in Beijing.

The trade surplus, which widened to $18.46 billion in April from $7.7 billion in March, will provide "a crucial force in driving up economic growth this year".

Louis Kuijs, chief economist in China at Royal Bank of Scotland Plc, remained cautious.

"We are not sure whether the April trade data will weaken the case for policymakers to provide more support to growth.

"Subdued import growth reflects slow demand growth in China, although imports look better in real terms. Looking ahead, we expect export growth to continue to improve in the coming months while import growth may remain subdued," Kuijs said.

Zhu Haibin, chief China economist at JPMorgan Chase & Co, said that improving shipments to developed markets, especially the United States and Europe, drove the upside surprise in April exports while "fake exports" continued to subside.

"After mixed conditions in the first quarter, commodity imports picked up momentum in April. Looking ahead, constructive global growth in the coming quarters will likely support gradual improvement in China's export sector," Zhu said.

Exports to the European Union rose a seasonally adjusted 7.8 percent in April, compared with a rise of 6.9 percent in March. Exports to the US expanded 11.2 percent, compared with a 2.4 percent drop in March.

Exports to Japan fell 1.4 percent, in contrast with a 20 percent gain in March.

Exports to the Association of Southeast Asian Nations grew 1.7 percent in April, down from a 23.3 percent rise in March.

Shipments to Hong Kong fell 4.5 percent in April, compared with a 3.7 percent drop in March, according to Zhu.

Much of the fake invoicing activity took place via Hong Kong.

Despite the modest improvement in April, exporters face an uphill climb. Exports of the world's largest merchandise trader have been losing steam this year. The 115th China Import and Export Fair, also known as the Canton Fair, reported the lowest export volume since 2009 as the fair concluded on Monday in Guangzhou. Export deals dropped by 3 percent from the autumn session to 194.61 billion yuan ($31.7 billion).

The State Council, China's cabinet, announced measures on April 30 to stabilize the "severe and complicated" foreign trade situation, including encouraging imports of advanced equipment, key parts, scarce resources and consumer goods, expanding services trade, cutting the export inspection list and ending some fees.