China’s trade likely extended declines in March on weak demand: Reuters poll

2:14 am Wednesday, April 12th, 2023

By Joe Cash

BEIJING (Reuters) – China’s exports and imports likely extended their declines in March, a Reuters poll showed on Wednesday, as weakening global demand squeezed factory supply chains and order books.

Data for March is expected to show a 7% fall in exports from a year earlier, bigger than the 6.8% drop recorded during the January-February period in which the Lunar New Year holiday fell and workers downed tools.

Such a result would add to policymakers’ concerns about China’s fragile economic recovery. The trade data will be released on Thursday.

Exports have struggled in the months following China’s decision to drop its COVID curbs in December, when the world’s second-largest economy re-opened. Once a major driver of economic strength, exports have not risen for five months.

Imports in March are expected to have fallen 5% from a year earlier, improving on the 10.2% drop seen in the January-February period, but continuing to reflect weak foreign demand, since the country brings in parts and materials from abroad for inputs in many of its exports.

Newly appointed premier Li Qiang told a cabinet meeting last week that officials should “try every method” to grow trade with developed economies and encourage companies to further explore emerging market economies, such as those in Southeast Asia.

New export order gauges in both official and private-sector factory activity surveys fell in March, with the Caixin/S&P Global manufacturing purchasing managers’ index dropping back below the 50-point line that separates expansion and contraction.

China is not alone in its trade woes. Other Asian exporters such as South Korea and Vietnam have also seen exports decline in the first few months of 2023.

South Korean exports to China, a leading indicator of China’s imports, were 33.4% lower in March than a year earlier, the sharpest drop in over 14 years and extending losses to a 10th straight month.

(Reporting by Joe Cash; Polling by Madhumita Gokhale and Anant Chandak; Editing by Sam Holmes)