China swings to surprise trade surplus in March

BEIJING Tue Apr 10, 2012 9:29am IST

A general view of a container port in Shanghai February 10, 2011. REUTERS/Aly Song/Files

A general view of a container port in Shanghai February 10, 2011.

Credit: Reuters/Aly Song/Files

BEIJING (Reuters) - China swung to a surprise trade surplus of $$5.35 billion in March as exports grew faster than expected and import growth eased from a 13-month peak, customs data showed on Tuesday.

Import and export growth were both down sharply from February's Lunar New Year distorted surge, and within sight of the government's target of 10 percent expansion for 2012.

The data reinforced the view of most analysts that China's trade-sensitive economy is set for a soft landing, with GDP growth likely to have eased for a fifth successive quarter to 8.3 percent in the first three months of 2012 and remaining on course for its slowest year of expansion in a decade.

"The trade data looks okay... it shows the global economy is recovering, albeit slowly," said Zhou Hao, an economist with ANZ Bank in shanghai.

"Given that China had a trade surplus in the first quarter versus a deficit in the Q1 last year, it indicates a positive contribution to GDP growth. We reckon Q1 GDP growth should be 8.6 percent. I think the market is a bit too pessimistic about China's economy."

Import growth of 5.3 percent in March compared with economists' expectations of 9.0 percent and February's 39.6 percent growth, while export growth of 8.9 percent compared with a consensus call for 7.2 percent, still a marked easing from February's 18.4 percent rate.

The two numbers left the overall trade balance in surplus, reversing February's $31.5 billion run of red ink on the balance of payments and confounding market expectations of a $1.3 billion deficit.

But despite the unexpected return to surplus, the relatively slack pace of export growth may still concern investors who believe the risks of recession in the debt-ridden European Union -- China's top export market -- could be a dangerous drag on growth in the world's number 2 economy.

March data provided the first hard economic numbers of the year not distorted by the impact of the Lunar New Year holiday that fell in January this year, causing considerable skew in comparisons with the February 2011 holiday.

China's data releases build to a crescendo through the week with first quarter GDP numbers expected to be published on Friday and forecast to show the slowest quarter of growth in nearly three years.

Inflation data published on Monday kept the government on stand-by to deliver more growth-oriented policies, with a trend of easing consumer costs in the first quarter confirmed while producer prices revealed risks to the industrial sector recovery.

The People's Bank of China has cut the proportion of deposits banks must keep as reserves by 100 basis points in two moves since autumn 2011 in a bid to keep credit growing in the face of a recent slowdown of foreign capital inflows, which had underpinned money supply growth for much of the last decade.

(Reporting by Nick Edwards; Editing by Alex Richardson)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

Scotland Referendum

Scotland Referendum

Scots vote in record numbers, await independence verdict.  Full Article 

India-US Diplomacy

India-US Diplomacy

Obama to nominate Indian-American Richard Verma as India ambassador - congressional source.  Full Article 

GMR in Nepal

GMR in Nepal

Nepal clears India’s GMR plan for $1.4 bln hydroelectric plant.  Full Article 

LIC on Markets

LIC on Markets

LIC chairman bullish on Indian markets  Full Article 

India Rains

India Rains

Monsoon rains weaken as late retreat looms.  Full Article 

Ellison Quits

Ellison Quits

Oracle's Ellison steps aside, co-CEOs Catz and Hurd take over.  Full Article 

Infosys-Huawei

Infosys-Huawei

Infosys partners with China's Huawei for cloud-based services  Full Article 

Gold Outlook

Gold Outlook

Gold imports seen up, premiums likely to double on festive buying  Full Article 

Trade Dispute

Trade Dispute

U.S. to press India on trade row during Modi's Washington visit  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage