China’s exports declined 3.5 per cent in March compared to a year earlier as the coronavirus continued to impact the world’s second-largest economy, but imports rose 2.4 per cent, according to yuan data released on Tuesday by the General Administration of Customs.
The value of China’s exports dropped to 1.29 trillion yuan (US$183 billion), with March’s imports rising to 1.16 trillion yuan. In combined figures for January and February, export’s had dropped 15.9 per cent, while imports dropped 2.4 per cent in yuan terms.
“With Covid-19 spreading worldwide, the global economy faces mounting downward pressure. Uncertainties are on the rise. China's foreign trade is encountering major difficulties,” said Chinese customs spokesman Li Kuiwen.
Overall in the first quarter of 2020, China’s exports dropped 11.4 per cent to 3.33 trillion yuan, with imports down 0.7 per cent to 3.24 trillion yuan.
China’s total trade with the United States dropped 18.3 per cent in the first quarter, while imports and exports with the European Union were down 10.4 per cent. Trade with Japan dropped 8.1 per cent.
Trade with the 10 Asean countries increased by 6.1 per cent making the group China’s largest trading partner in the first quarter, accounting for 15.1 per cent of China’s total global trade volume in yuan terms.
China’s trade data in US dollar terms has not yet been released.
“Shipments picked up last month as factories reopened and domestic demand began to recover. But with economic activity in the rest of the world now collapsing, the worst is still to come for China’s export sector,” said Julian Evans-Pritchard, senior China Economist at Capital Economics.
“The improvement in trade was probably larger than the change in the headline figure suggests. After all, March shipments were stronger than the average across January (before the outbreak impacted trade) and February (when most factories were closed, and port operations were disrupted).”
In the first quarter, China’s soybean imports increased 6.2 per cent from a year earlier, while pork imports increased 1.7 times. Beef imports rose 64.9 per cent, while China imported 5 per cent more crude oil.
With the end of the lockdowns that shut most Chinese manufacturers in February, most Chinese exporters had resumed at least 70 per cent of their production capacity by March 30, according to the Ministry of Commerce.
But while production has recovered, factories are now faced with a lack of foreign orders due to the impact on demand from the spread of the coronavirus in the United States and Europe.
“The recovery in exports is likely to be short-lived. Although supply-side disruptions to factory activity have now eased, foreign demand will slump this quarter as Covid-19 weighs on economic activity outside of China,” added Evans-Pritchard from Capital Economics.
“Imports should hold up better given that domestic demand looks set to stage a further recovery in the coming months. But since a sizeable portion of imports feed into China’s export sector, inbound shipments will also come under pressure.”
On Friday,China’s producer price index, reflecting the prices that factories charge wholesalers for their products, dropped 1.5 per cent year-on-year last month, according to the National Bureau of Statistics.
China is also pushing ahead with the 3rd China International Import Expo, which is scheduled to take place in November in Shanghai, the commerce ministry said, with more than 1,000 companies having already registered to attend the event.
On Monday, South Korea confirmed exports for the first 10 days of April tumbled 18.6 per cent from the same period a year earlier, a sharp reversal from the 20.8 per cent jump in March.
Imports into Asia’s fourth-largest economy – considered a bellwether for world trade – also dropped 13.0 per cent, compared to a 14.5 per cent rise in the previous month, according to Korea Customs Service data.
Shipments to China, South Korea’s biggest trading partner, declined 10.2 per cent.