Fears grow as China's exports unexpectedly shrink, Latest Business News - The New Paper

Fears grow as China's exports unexpectedly shrink

This article is more than 12 months old

BEIJING: China's exports unexpectedly shrank last month but imports surprised with their first increase in five months, painting a mixed picture of the economy as Washington ratchets up pressure on Beijing with threats of more punishing tariffs.

The latest trade data, which would normally be pored over for clues on how the world's second-largest economy is faring, has been overshadowed by worries that the US-China trade war is escalating, rather than nearing a resolution as many investors had expected.

High-level Chinese and US negotiators will meet in Washington in the next two days, as Beijing tries to avoid a sharp increase in tariffs on its goods ordered by President Donald Trump to take effect from Friday.

Investors have been hoping that China's April trade data would add to signs that its economy is beginning to steady, easing worries about cooling global growth.

But exports fell 2.7 per cent from a year earlier, customs data showed yesterday.

ANZ estimated that more than 80 per cent of the headline decline was due to a sharp drop in shipments to the US, while its high-tech exports continued to be weighed down by sluggish global demand for smartphones and other electronic gadgets.

Economists polled by Reuters had expected growth to slow to 2.3 per cent after March's surprising 14.2 per cent jump.

"The outlook for Chinese exports is challenging. If Trump follows through on his latest tariff threats, we think this would drag down export growth by 2 to 3 percentage points," Capital Economics said in a note. - REUTERS