China records unexpected gains in imports

ST Staff
Friday, 8 May 2020

Due to the COVID-19 pandemic, this rise in imports has been seen as temporary by economists around the globe.

As demand falls worldwide, China's exports suddenly rose in April. This was due to increased shipments towards South East Asia; however, experts point out that since that with the world going through a pandemic this increase in exports is temporary, the imports also fell.

Compared the previous year's exports, an increase of 3.5 per cent has been recorded, while imports see a fall of 14.2 per cent as reported by the customs administration. It had been forecasted that the imports would fall by 10 per cent and the exports will dip by 11 per cent. Given the Lunar New Year, China's exports typically start slowly in the first quarter and then grow from April. Though there were some signs of recovery from the domestic downturn at the height of coronavirus outbreak in March, restrictions on controlling the pandemic in other parts of the world had been expected to weigh on export orders and disrupt supply chains. 

"April shipments may have been boosted by exporters compensating for shortfalls in the first quarter due to subsequent supply constraints," said Louis Kuijs, Head of Asian Economics at Oxford Economics Hong Kong Ltd. "As reported by the weakness of new PMI export orders, exports should be significantly weakened in the near term as China's main trading partners fell into deep recessions."

In April, the earliest economic indicators showed the nascent recovery was still losing momentum. One thing to remember here is the unexpected increase in exports across Asia was not uniform-South Korea's exports dropped by more than 24 per cent in April, the most significant decline since the global financial crisis, with shipments to all destinations sharply declining. 

Mechanical and electrical products worth nearly 2.8 trillion yuan ($395 billion) were shipped in the first four months, with more than 800 billion yuan of that just in April, according to the report. This points out where the increase in exports has taken place.

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