BEIJING: China’s exports fell unexpectedly in April as imports posted their sixth straight monthly decrease, official data showed on Friday, with analysts calling for more stimulus to bolster the world’s second-largest economy.
The country’s exports dropped 6.4 percent year-on-year in April to $176.3 billion, the customs authority said—well below the median forecast of a 0.9 percent rise in a Bloomberg News poll of economists.
The fall was accompanied by a 16.2 percent drop in imports to $142.2 billion, the sixth monthly decline in a row, suggesting sustained weakness in domestic demand.
The export and import figures for April showed a trade surplus of $34.1 billion, Customs said, compared with $18.5 billion a year ago.
Analysts said the disappointing figures reflected persistent frailty in the Chinese economy and provided more evidence that further policy loosening is needed.
“The trade data indicate that current growth momentum remains soft, calling for more monetary policy easing,” Nomura economist Zhao Yang said in a note.
China’s gross domestic product (GDP) expanded by 7.4 percent in 2014, the lowest rate in nearly 25 years.
Growth slowed further to 7.0 percent in the January-March period, the worst quarterly result in six years and down from 7.3 percent in the final three months of 2014.
More recent data showed the downturn may have extended into the second quarter.
British bank HSBC’s purchasing managers’ index, which tracks activity in China’s factories and workshops, recorded its worst contraction in a year in April as subdued domestic demand continued to weigh on growth, it said this week.
Chinese leaders have said they are ready to accept slower but more sustainable expansion, as they try to transform an investment-driven growth model to one in which consumers take center stage.
But authorities have stepped up stimulus efforts since late last year in a bid to ensure the slowdown does not get out of hand.
The central People’s Bank of China has cut interest rates twice since November and reduced two times the amount of cash banks must keep in reserve, along with other measures to inject liquidity into the market.
April’s trade figures followed a 15.0 percent year-on-year decrease in exports in March, and a 3.3 percent drop in January.
February overseas shipments increased by 48.3 percent, mainly due to seasonal distortion around the Lunar New Year holiday.
ANZ economists expected prolonged difficulties ahead for international commerce as other industry-related data remain weak.
“As the port throughput data remain soft, we continue to see strong headwinds in China’s trade sector in the foreseeable future,” they said in a report.
Authorities are expected to introduce incentives such as tax cuts and more interest rate reductions, ANZ said.
“It is likely that China needs to add targeted stimulus on both fiscal and industrial sectors.”
Beijing cut its trade growth target for this year to about 6.0 percent, from the 7.5 percent goal set for last year.
Actual trade expanded 3.4 percent in 2014, the third consecutive time the annual target was missed.
Julian Evans-Pritchard, an economist with research firm Capital Economics, cautioned that unlike previous weakening in imports caused by falling commodity prices, April’s contraction was “at least partly driven” by lower incoming volumes, suggesting “the ongoing slowdown in investment, particularly property, has further weighed on domestic demand.”
But he was optimistic about the outlook for Chinese trade, citing likely stable demand in foreign markets and a recovery in international commodity prices.
“We expect negative export growth to prove short lived,” he wrote in a note.
But while slowing investment growth will remain a drag, he said, import growth should begin to gradually recover as the price of many key commodities “appears to have bottomed out.”