China's exports rise following relaxation of Covid rules

10 May 2023

An 8.5% increase in exports was one of the bright spots among China’s otherwise mixed economic figures for April.

The data represented a second straight month of export growth. Imports, however, fell 7.9% year on year – worse than economic forecasts, which had predicted they would remain unchanged. Exports slightly beat a forecast rise of 8% for the month.

The figures follow a surprise 14.8% jump in exports recorded for March, which analysts attributed to the Chinese economy rebounding from the relaxation of the country’s hard-line anti-Covid policies.

It also reflected a seasonal bounce following the Lunar New Year. However economists Goldman Sachs said that April's trade data “likely reflects the dissipation of this seasonal bias”.

The National Bureau of Statistics manufacturing purchasing managers’ index (PMI) fell below 50 – meaning it is seen as contracting rather than expanding – reading 49.2 in April, down from 51.9 in March. Goldman Sachs economists described China's economy as being “past the fastest stage of its reopening”.

China’s cabinet has unveiled several measures to help its manufacturing sector, which employs about 18% of the country’s workforce.

These included supporting auto exports, facilitating visas for overseas business people and providing subsidies to firms that hire college graduates.

In its latest trading update, ocean carrier Maersk echoed these findings. 

It said: “Mainland China’s economic growth is reviving after the end of zero-Covid policy, and…retail sales, service sectors as well as industrial production grew. As an overall result we see the export volume increase, especially into Africa and Latin America markets.

“Port situations are stabilised globally including the US and Europe. In China with the upcoming fog season, we forecast certain impacts on the terminal operations.”

The carrier also noted that March had been the first time it had seen global port congestion climb since the pandemic, largely due to labour conflicts in the US and heavy weather impact in China.

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