China’s trade surplus reappeared in April, with exports up 30.5% year-on-year, well above the market forecast. Imports grew by 49.7% y-o-y, a slower rate than March’s 66.4% growth. If you seasonally adjust the figures, exports were up 11.4%, and imports 6.9%.
The figures contradict the statements that continue to pour out of Beijing about the fragility of China’s export sector. It was very useful, politically, for the Chinese government to have that March trade deficit, but, as we pointed out at the time, it was a small blip in an otherwise healthy picture.
Breaking down the figures, it becomes clear that China’s exporting strength is not just to developing markets, which have taken up the slack in the wake of the financial crisis, but also to the first world. Shipments to Japan and the US were up 24.6% and 19.1% respectively.
And despite the crisis in Greece, demand from the Eurozone remained strong, rising 28.5% in April (compared to 24.6% in March). In other words, emerging markets may be important alternative destinations for Chinese goods, but Europe, the US and Japan are all still buying.
On the import side, China is still importing large quantities of machinery and high tech products, and increasing amounts of crude oil.
Overall, the picture is one of health, and it could point to a resurfacing of the debate about whether or not the renminbi should start to appreciate this year.