China reports very weak trade figures for April 201210 May, 2012, 11:53. Posted by Zarathustra
China’s General Administration of Customs just reported the latest trade figures for April 2012, which I found disturbingly weak.
Exports growth for April was 4.9% year-on-year, way below the market estimates of 8.5% (and even below the lowest estimate on Bloomberg). Imports growth was a mere 0.3% yoy, again, way below the market estimates of 10.9%. Comparing the latest figures to the previous month, without seasonal adjustment, exports were down 1.5% on the month, and imports were down 9.7% on the month. Imports, as we can see, are disturbingly weak.
The trade balance was in a surplus of US$18.426 billion, above market estimates of US$9.9 billion, which could be attributed to weak exports performance and even weaker imports growth, which is not a good news at all.
Source: General Administration of Customs
The apparently “strong” trade surplus figure has masked the underlying weakness of the trade picture. We would have expected a weak export figure because of the on-going recession in the Eurozone, but the import growth figure is simply bad, which suggests very weak domestic demand. I expect exports to continue with the weaknesses as the global economy slows on Eurozone mess, and imports will likely to remain weak as demand weakens on the burst of the real estate bubble (via weak investment and probably consumer demand).
And while the trade figures are much weaker than the market expected, these numbers confirm the view here that the Chinese economy is in very bad shape. I believe the worst is not over for the Chinese economy despite the fact that I have mentioned that signs of stabilisation were seen in the past two or few months. This set of trade figures should make the market re-assess the overly optimistic consensus (in my view) that the China economy has bottomed out.