© Reuters. An aerial view shows containers and cargo vessels at the Qingdao port in Shandong province, China May 9, 2022. Picture taken with a drone. China Daily via REUTERS
By Joe Cash and Ellen Zhang
BEIJING (Reuters) -China’s exports unexpectedly surged for March, driven by strong shipments of solar products, new-energy vehicles and lithium batteries and as supply chain conditions continued to improve from their COVID paralysis.
Meanwhile, imports fell less than expected, with economists pointing to an acceleration in the purchase of agricultural products, especially soybeans, as proving some support.
Exports in March shot up 14.8 from a year ago, snapping five straight months of declines and much better than the 7.0% fall forecast by analysts. Imports dropped just 1.4%, smaller than the 5.0% decline forecast and a 10.2% contraction in the previous two months.
While the figures provide some relief for investors worried about the health of the world’s second-largest economy, analysts doubt the strength can be sustained as demand in major economies elsewhere flags.
“China’s export growth soared in March. This came as a surprise to the market,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. “The positive surprise may be partly due to a low base effect – the COVID outbreaks in March last year forced many factories to shut down,” he added.
Lv Daliang, spokesperson of the General Administration of Customs, attributed the upside surprise to strength in demand for electric vehicles, solar products and lithium batteries.
However, he warned conditions could worsen going forward.
“The external environment is still severe and complicated at present,” Lv told reporters in Beijing on Thursday. “Sluggish external demand and geopolitical factors will bring greater challenges to China’s trade development,” he added.
Newly appointed premier Li Qiang told a cabinet meeting last week that officials should “try every method” to grow trade with developed economies and push companies to further explore emerging market economies, such as those of Southeast Asia.
China has set a growth target of around 5% for gross domestic product (GDP) this year, after severe pandemic controls last year knocked the economy to one of its slowest rates in decades. Last year’s GDP rose only 3%.