BEIJING: Trade grew faster than expected last month for China, official data showed Saturday, withstanding pressure from the Iran war and reversing a decline in exports to the United States.
Booming trade has represented a vital lifeline for China in recent years as the domestic economy lags, with sluggish spending and a stubborn debt crisis in the property sector weighing on activity.
The war with Iran, launched by the United States and Israel in late February, has produced new risks for China’s economy, though its trade has so far appeared to be weathering the disruptions.
China Exports from the manufacturing powerhouse were up 14.1 percent in April compared to the same month last year, the General Administration of Customs (GAC) said.
The growth outpaced a Bloomberg forecast of 8.4 percent based on a survey of economists, and also picked up significantly from the 2.5 percent increase in March.
Analysts say China’s diversified energy supply insulates it from immediate shocks from the war, though any global economic downturn would eventually weaken demand for its exports.
Amid a shaky truce, observers are awaiting a high-stakes meeting in Beijing next week between Chinese President Xi Jinping and US counterpart Donald Trump.
The talks previously set for late March were delayed by the war in the Middle East, which has sent global energy prices soaring as shipping through the vital Strait of Hormuz has effectively come to a halt.
The world’s second-largest economy produced a record-breaking trade surplus last year at $1.2 trillion.
For Trump, imbalance in the countries’ trade relationship has long been a major sticking point.
Superpower summit
Ahead of the key meeting, China’s exports to the United States grew 11.3 percent year-on-year in April, GAC data showed Saturday, returning to growth after dropping sharply by 26.5 percent in March.
Shipments to the United States had also dropped 11 percent in January and February combined.
Trade is set to be a prominent topic in the upcoming meeting between Xi and Trump, with both leaders eyeing key concessions for their massive economies.
Beijing has set an official target growth range for this year of 4.5-5.0 percent — the lowest in decades.
Early indications suggest the country’s economy is on pace, with growth in the first quarter reaching the top of that range at five percent, according to government data released in April.
Economists argue that China should shift towards a growth model powered more by household consumption than traditional drivers including real estate and infrastructure investment.
In a positive sign for domestic spending, imports into the world’s second-largest economy grew 25.3 percent year-on-year last month, the GAC data showed Saturday.
That figure beat a Bloomberg forecast of 20.0 percent but was slightly lower than the 27.8-percent surge in March.
Monthly inflation data due Monday is expected to shed further light on how efforts by leaders to encourage consumers to pull out their wallets have been faring.