FX.co ★ China Exports & Imports Rebound In April

Data released on Thursday indicated a surprisingly strong rebound in China's exports and imports during April. This follows a previous dip in trade, raising optimism that net trade could bolster economic growth.

The customs office reported that, mainly due to a lower comparison base, exports experienced a year-on-year increase of 1.5 percent in April. This rate outpaced the expected growth of 1.0 percent and counterbalanced the 7.5 percent drop reported in March.

At the same time, imports saw an 8.4 percent annual rise, compared to a drop of 1.9 percent in the previous month. Economists had anticipated a smaller increase of 5.4 percent.

The trade surplus for April also exceeded expectations, coming in at $72.4 billion compared to $58.6 billion in March. However, it was still less than the projected figure of $81.4 billion.

Zhuang Zichun, an economist at Capital Economics, projected that export volumes will likely fall in the near future due to a slowdown in consumer spending in advanced economies, coupled with diminishing export price benefits. Conversely, predictions suggest that imports will recover in the following months as the fiscal stimulus for investment spending is set to increase the demand for industrial commodities.

With resilient import demand and a potentially increased risk factor for exports in the upcoming months, Lynn Song, an economist at ING, expects a smaller trade contribution to growth starting in the second quarter.

The Organisation for Economic Co-operation and Development (OECD) suggested last week that China's exports will recover as global demand improves and more Chinese goods become internationally competitive. The organization predicts that the world's second-largest economy will grow by 4.9 percent this year and 4.5 percent in 2025.