China: Export growth rebounds in April – Nomura

According to analysts at Nomura, China’s April trade data surprised on the upside as export growth in USD terms rose to a stronger-than-expected 12.9% y-o-y in April after falling sharply to -2.7% in March (Consensus: 8.0%; Nomura: 7.0%).

Key Quotes

“The distortion from a prolonged lunar new year holiday season (the Lantern Festival was in early March this year) weighed on export growth in March, but the effect subsided in April, with production returning to more normal levels.”

“Import growth jumped to 21.5% y-o-y in April from 14.4% in March, beating expectations (Consensus: 16.0%; Nomura: 15.0%). Strong import growth in April echoed President Xi’s pledge to voluntarily increase imports; notably, growth of imports from the US jumped to 20.3% y-o-y from 3.2% in March. As a result, the trade balance returned to a surplus of USD28.8bn from a temporary deficit of USD5.0bn in March.”

“Looking ahead, we expect export growth to moderate due to the earlier appreciation of the RMB real effective exchange rate and continued Sino-US trade tensions. We also expect import growth to slow on a weakening outlook for domestic investment demand, but only gradually, supported by the pledge to voluntarily increase imports.”