Chinese export growth at weakest in nine months in April

Chinese export growth was at its weakest in nine months in April, weighed down by the prospect of US tariffs and, possibly, by the recent appreciation in the value of the country's currency, according to analysts.

According to the Chinese Customs Administration, the year-on-year rate of growth in China's exports picked-up from a -2.7% pace for March to 12.9% (consensus: 8.0%), alongside a quickening of import growth from a 14.4% clip to 21.5% (consensus: 16.5%), leaving a trade surplus of $28.bn (consensus: $27.9bn).

Yet the improvement in the data was wholly down to seasonal effects, after the late Easter had weighed on activity during the month before, said Julian Evans-Pritchard at Capital Economics.

The possibility of US tariffs on Chinese goods had weighed on firms' outlook and possibly as well the recent strengthening in the trade-weighted yuan, Evans-Pritchard said.

Indeed, in seasonally adjusted terms and expressed in yuan, he estimated that export volumes declined by 2.0% month-on-month.

That was still "healthy", but nevertheless pointed to "softer" external demand recently, although the breakdown of the figures was not detailed enough to pinpoint the exact geograoghical source of weakening demand.

One silver lining was that the import data suggested that domestic demand was proving "fairly resilient", he said.

"[...] While softer foreign demand is largely being offset by domestic strength for now, the headwinds to growth from slower credit creation look set to increase and officials have started to sound less confident on the outlook for this year," Evans Pritchard added.

"This will hopefully encourage them to adopt a pragmatic approach to trade negotiations in order to try to avoid the imposition of tariffs and an even sharper slowdown in export growth."