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By Joe Cash and Ellen Zhang
BEIJING, April 13 (Reuters) - China's exports
unexpectedly surged in March, with officials flagging rising
demand for electric vehicles, but analysts cautioned the
improvement partly reflects suppliers catching up with
unfulfilled orders after last year's COVID-19 disruptions.
Exports in March shot up 14.8% from a year ago, snapping
five straight months of declines, stunning economists who
predicted a 7.0% fall in a Reuters poll.
But analysts say the jump was more likely related to
exporters rushing to fulfil a backlog of orders that had been
disrupted by the pandemic in past months, and warned the global
demand outlook remained subdued.
"The wave of COVID outbreaks in December and January likely
depleted factories' inventories. Now that factories are running
at full capacity, they caught up the cumulated orders from the
past," said Zhiwei Zhang, chief economist at Pinpoint Asset
Management."
"The strong export growth is unlikely to sustain given the
weak global macro outlook," he added.
Meanwhile, imports fell less than expected, with economists
pointing to an acceleration in the purchase of agricultural
products, especially soybeans, as providing some support.
Imports dropped just 1.4%, smaller than the 5.0% decline
forecast and a 10.2% contraction in the previous two months.
Lv Daliang, spokesperson of the General Administration of
Customs, attributed the upside surprise to strength in demand
for electric vehicles, solar products and lithium batteries.
However, he warned conditions could worsen going forward.
"The external environment is still severe and complicated at
present," Lv told reporters in Beijing on Thursday. "Sluggish
external demand and geopolitical factors will bring greater
challenges to China's trade development," he added.
China's strong performance contrasts with that of other
Asian exporters, such as South Korea and Vietnam, which have
both seen exports decline in the first few months of 2023,
contributing to doubts that it can be sustained.
"We aren’t convinced that this rebound will be sustained
given the still gloomy outlook for foreign demand," Capital
Economics analysts said in a note.
"We expect most developed economies to slip into recession
this year and think that the downturn in Chinese exports still
has some way to run before it reaches a bottom later this year."
China's newly appointed premier Li Qiang told a cabinet
meeting last week that officials should "try every method" to
grow trade with developed economies and push companies to
further explore emerging market economies, such as those of
Southeast Asia.
Beijing has set a growth target of around 5% for gross
domestic product (GDP) this year, after severe pandemic controls
last year knocked the economy to one of its slowest rates in
decades. GDP rose only 3% last year.
(Reporting by Joe Cash and Ellen Zhang; Editing by Clarence
Fernandez and Sam Holmes)
