China’s exports and imports are expected to record double-digit declines in April after a tentative recovery in March as the coronavirus pandemic batters global demand and disrupts manufacturing supply chains, a Reuters poll showed.
The pessimistic projections reinforce concerns that the collapse in global demand will restrain the recovery in the world’s second-biggest economy as it gets back on its feet after weeks of paralysis due to the virus outbreak.
Shipments out of China are likely to have fallen 15.7% in April from a year earlier, according to a median estimate from the survey of 28 economists, far worse than a 6.6% contraction in March. Exports contracted by 17.2% in the first two months of the year. Imports, meanwhile, are expected to have shrunk 11.2% from a year earlier, the sharpest drop since July 2016 and versus a 0.9% fall the previous month as domestic demand remained tepid.
“The cracks in overseas supply chains and shrinking demand would lead to further declines in exports (for the second quarter),” said analysts at Industrial Bank in Shanghai in a note on Sunday, adding that more than half of China’s processing trade depends on imported materials from other countries. The bank is forecasting exports will drop 15% on year in the second quarter, compared with a 13.3% fall in the first quarter.