BEIJING: China’s export growth halved last month in US dollar terms as imports slowed more than expected. That slowdown tracked recent reports that suggested slower expansion in the country’s manufacturing sector in April, with a spillover into May as last week’s sharp slide in commodity prices showed. Driving much of the slowdown in activity and the markets is the continuing official crackdown in dodgy financial dealings, especially among so-called ’shadow banks’ who have been active in some markets, including iron ore, gold and copper. The impact of the crackdown has been dramatic – for example China’s foreign exchange reserves rose well above $US 3 trillion for a third month in a row as the clampdown on dodgy capital transactions hit home.
And China’s sharemarkets hit a seven month low yesterday as the impact of the funding crackdown expanded. Reining in excessive local government debt and the shadow banking sector in China has been high on the central government’s agenda this year, leading to concerns that tighter liquidity will affect completion of some large infrastructure projects and the housing sector. Data from China’s General Administration of Customs yesterday showed exports grew 8% on year in dollar terms in April, half the 16.4% rise in March. Imports rose a still solid 11.9% year on year from April 2016, but that was down sharply from the near 20% growth in March and falling well below forecasts of an 18% rise. April trade flows took China’s trade surplus to $US38.1 billion, up from $US23.9 billion in March. Exports to the United States rose 11.7% in April from a year earlier while imports from the US were up just 1.5%.
China’s trade surplus with the US was $US21.34 billion in April, up from $US17.74 billion in March, according to data from China’s customs bureau, while that with the EU climbed $US3.1 billion to $US10.8 billion. That sluggish rise in inbound shipments follows an independent reading on China’s domestic manufacturing sector for last month that pointed to the slowest expansion since September.
