China's exports staged a turnaround in March, while a decline in imports narrowed, customs data showed on Wednesday, adding to signs of stabilization in the economy.
Exports in yuan-denominated terms surged 18.7 percent year on year in March, the first increase since December, compared with falls of 20.6 percent in February and 6.6 percent in January, according to figures from the General Administration of Customs (GAC). Imports dipped 1.7 percent, an improvement from February's 8-percent drop. That led to a monthly trade surplus of 194.6 billion yuan (29.9 billion U.S. dollars), down from February's 209.5 billion yuan.
GAC spokesperson Huang Songping attributed the rebound in exports to a lower comparative base from the same month last year and government supports. "The outlook for exports appears to have become moderately brighter," Tom Orlik, chief Asia economist with Bloomberg, said, as export order sub-indexes for the manufacturing Purchasing Managers' Index (PMI) rose in March, "signaling stabilization rather than improvement." The contraction in imports narrowed more than expected, partly due to higher commodity prices, but also thanks to stabilizing domestic demand and accelerating property and infrastructure investment, said HSBC economist Li Jing.
Huang said China's foreign trade still faces "relatively big downward pressure," as global economic uncertainties and trade protectionism weigh on growth, but added that exports are likely to steady in the second quarter. Foreign trade in the first quarter was 5.9 percent lower than a year earlier at 5.2 trillion yuan, with exports down 4.2 percent and imports 8.2 percent. Trade surplus for the first quarter widened 8.5 percent from a year earlier to 810.2 billion yuan. Imports of iron ore, crude oil and copper all posted strong increases in the first quarter -- up 6.5 percent, 13.4 percent and 30.1 percent, respectively. Exports to the European Union, China's biggest trade partner, dropped 1.4 percent year on year in the first three months of 2016, the GAC data showed.
In the same period, exports to the United States, China's second-biggest trade partner, declined 3.4 percent and exports to the Association for Southeast Asian Nations, the third-largest trade partner, dipped 8.5 percent. Wednesday's trade data came among a string of figures that suggested a stabilization in China's economy, including official PMI and power use. China is scheduled to release its first-quarter GDP as well as consumption, investment and industrial output data on Friday. '
The country's stock markets extended morning gains after the release of trade data, with the benchmark Shanghai Composite Index up 1.8 percent as of 2:30 p.m. "As the recovery in exports is still fragile considering the tepid growth outlook for China's major export markets such as the EU and United States, domestic demand remains the key driver for China's growth this year," Li Jing said, suggesting proactive policy easing measures are needed to support domestic demand and mitigate downside risks brought by deflationary pressures.
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