China trade hit hard by competition
CHINESE exports and imports fell sharply last month, data showed yesterday, as officials noted that the world's second-largest economy faces headwinds from tougher regional competition and "friction" with trade partners.
The figures are potentially another cause for concern about the the economy, which has shown signs of weakness recently with a string of disappointing indicators on trade, industrial output and consumer spending.
Imports slumped 11.3 per cent year-on-year to US$162.4 billion (S$203 billion) while exports fell 6.6 per cent to US$170.1 billion, the General Administration of Customs announced, resulting in a surplus of US$7.7 billion.
China recorded a surprise deficit of US$884 million in March last year.
The results confounded market expectations, which projected growth of 4.2 per cent in exports and 2.8 per cent in imports, according to the median forecasts in a survey of 16 economists by Dow Jones Newswires.
China recorded an unexpected trade deficit of almost US$23 billion in February, which the authorities blamed on the Chinese New Year holiday season. That result was China's first monthly deficit in 11 months.
"Currently our foreign trade indeed is having some difficulties," Customs spokesman Zheng Yuesheng said in a statement.
"China's foreign trade has seen its competitive advantages in traditional trade being eclipsed due to negative factors, including rising competition posed by neighbouring countries and regions and increasing trade friction with major trade partners."
But Mr Zheng urged calm, saying the setback will be "temporary and short-lived". He added: "We cannot jump to the conclusion that our foreign trade is having a recession."
For the first three months of this year, China recorded a trade surplus of US$16.7 billion - down sharply from US$43.1 billion the year before - as exports fell 3.4 per cent to US$491.3 billion and imports rose 1.6 per cent to US$474.6 billion, the figures showed.
Analysts cautioned that the latest trade figures continued to be affected by fake reporting of exports seen early last year.
"We believe that China's trade growth in the first few months would be distorted as the export over-invoicing activities last year have inflated the base for comparison," ANZ Bank economists Liu Li-Gang and Zhou Hao said in a research note.