China’s exports contracted sharply in March while imports unexpectedly shrank, undershooting forecasts by big margins, highlighting the stiff task facing policymakers as they try to bolster a shaky economic recovery.
“Despite a larger-than-expected year-on-year fall in export values, export volumes edged up to record highs”, analysts at Capital Economics said, suggesting Chinese exporters are continuing to slash prices to maintain sales amid stubbornly weak domestic demand. Analysts warn Western concerns over China’s overcapacity in some industries may bring more trade barriers for the world’s manufacturing hub.
While overall exports weakened last month, steel shipments were the highest since July 2016, and jumped 30.7 per cent in the first quarter.The impact of falling exports in March is unlikely to be large, because real GDP growth is more closely linked to the volume, rather than value of exports, said Tianchen Xu, an economist at the Economist Intelligence Unit.China’s economy likely grew 4.
China’s economy got off to a relatively solid start this year after policymakers rolled out support measures in the second half of 2023 to revive household consumption, private investment and market confidence.