China’s exports surged in March

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Chinese trade data for March has come in mixed with a surge in exports partially offset by continued weakness in imports.

According to China’s customs department, exports grew by 11.5% in US dollar denominated terms from March 2015, easily beating expectations for an increase of 2.5%.

The gain — following a 24.5% collapse in the 12 months to February which was the steepest decline since May 2009 — marked the fastest annual growth seen since February 2015. It was also the first time since June last year that a year-on-year increase was reported.

By region, exports to the European Union rose by 17.9% from 12 months earlier, outpacing increases of 9.3% and 9.0% respectively to Japan and the United States.

While exports outperformed, imports continued to contract, falling 7.6% from 12 month earlier. Although the 17th decline in row, the figure was a sharp improvement on the 13.8% contraction recorded in February. It also topped expectations for a smaller decline of 10.2%.

Despite the rebound in exports reported during the month, the national trade surplus narrowed to $29.86 billion, the smallest seen since March 2015. It was slightly below expectations for a decrease to $30.85 billion.

The chart below tracks the annual change in imports and exports, along with China’s monthly trade balance.


While markets have taken the rebound in exports as a sign that China’s economy is continuing to improve, a spokesperson from China’s customs bureau suggested that the low base effect from March last year contributed to the enormous headline beat.

Indeed, in the three months to March the value of Chinese exports fell by 9.6% compared to the same period a year earlier, underlining the need for caution towards the March result.

Imports put in an equally weak performance, contracting 13.5% over the same period a year earlier.