BEIJING, April 13 (Reuters) – China’s exports rose unexpectedly in March as authorities boosted demand for electric vehicles, analysts warned, an improvement that suppliers caught up with unfulfilled orders after last year’s COVID-19 disruptions.
Exports in March rose 14.8% from a year earlier, snapping five months of declines, surprising economists who had forecast a 7.0% drop in a Reuters poll.
But analysts said that was related to exporters rushing to fulfill a backlog of orders disrupted by the pandemic in recent months, and warned of a subdued global demand outlook.
“The wave of Covid outbreaks in December and January may have reduced factory inventories. Now that factories are operating at full capacity, they are holding orders accumulated from the past,” said Shiwei Zhang, chief economist at Pinpoint Asset Management.
“Strong export growth is unlikely to be sustained given the weak global macro outlook,” he added.
Meanwhile, imports fell less than expected, with economists pointing to an acceleration in purchases of agricultural products, particularly soybeans, as providing some support.
Imports fell just 1.4%, smaller than the 5.0% decline forecast and a 10.2% contraction in the previous two months.
LV Daliang, spokesman for the General Administration of Customs, attributed the upside surprise to strong demand for electric vehicles, solar products and lithium batteries.
However, he warned that conditions could worsen in the future.
Lv told reporters in Beijing on Thursday that the external environment is currently more severe and complex. “Slow external demand and geopolitical factors will bring more challenges to China’s trade growth,” he added.
China’s strong performance contrasts with other Asian exporters such as South Korea and Vietnam, both of which saw export declines in the first few months of 2023, contributing to doubts about whether this would be sustainable.
“We do not believe this rebound will continue given an even bleaker outlook for foreign demand,” Capital Economists said in a note.
“We expect most advanced economies to slip into recession this year, and we think the decline in Chinese exports has some way to run before bottoming out later this year.”
China’s newly appointed Premier Li Keqiang told a cabinet meeting last week that authorities should “try every method” to boost trade with developed economies and push companies to explore more emerging market economies such as Southeast Asia.
Beijing has set a growth target of 5% of gross domestic product (GDP) this year, after strict pandemic restrictions last year pushed the economy to one of its slowest rates in decades. Last year GDP rose by only 3%.
Joe Cash and Ellen Zhang report; Editing by Clarence Fernandez and Sam Holmes
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