BEIJING (AFP) ― Chinese exports and imports fell sharply in March, data showed Thursday, as officials acknowledged the economy faced headwinds owing to tougher competition from neighbors and “friction” with trade partners.
Imports slumped 11.3 percent year-on-year to $162.4 billion while exports fell 6.6 percent to $170.1 billion, the General Administration of Customs announced, resulting in a surplus of $7.7 billion. China recorded a surprise deficit of $884 million in March last year.
The results confounded market expectations, which had been for growth of 4.2 percent in exports and 2.8 percent in imports, according to the median forecasts in a survey of 16 economists by Dow Jones Newswires.
The weak numbers may raise further concerns about the health of China’s economy, which has shown signs of weakness recently with a string of disappointing indicators, including on industrial production and consumer spending.
“Currently our foreign trade indeed is having some difficulties,” an unnamed Customs spokesman said in a statement.
“China’s foreign trade has seen its competitive advantages in traditional trade being eclipsed due to negative factors including rising competition posed by neighboring countries and regions and increasing trade friction with major trade partners.”
But the spokesman urged calm, saying the setback will be “temporary and short-lived” and adding: “We cannot jump to the conclusion that our foreign trade is having a recession.”
For the first three months of 2014, China recorded a trade surplus of $16.7 billion ― down sharply from $43.1 billion the year before ― as exports fell 3.4 percent to $491.3 billion and imports rose 1.6 percent to $474.6 billion, the figures showed.
But analysts cautioned that the latest trade figures continued to be affected by fake reporting of exports seen early last year.
“We believe that China’s trade growth in the first few months would be distorted as the export over-invoicing activities last year have inflated the base for comparison,” ANZ Bank economists Liu Li-Gang and Zhou Hao said in a research note.
Import growth, however, was expected to remain a problem.
“At first glance, the weakness appears to be broad based, with both imports for processing and re-export and imports for domestic use contracting year-on year,” Julian Evans-Pritchard, China economist at Capital Economics, said in a research note.
Growth in imports was expected to “remain relatively weak as slowing investment spending is likely to weigh on imports of commodities and capital goods,” he added.
“As a result, China’s trade surplus is likely to rebound further over the coming year.”
China last week announced a mini-stimulus to boost slowing growth, including extending tax breaks for small businesses and support measures for poor urban districts.
In his government work report to China’s Communist-controlled National People’s Congress legislature last month, Premier Li Keqiang set the target for growth in two-way trade this year at 7.5 percent. The actual increase last year was 7.6 percent, missing the eight percent goal set by authorities.
China recorded an unexpected trade deficit of almost $23 billion in February, which authorities blamed on the Chinese New Year holiday season. That result was China’s first monthly deficit in 11 months.