The surprising increase in China’s exports in March was attributed to increased demand for electric cars, but analysts have warned that this gain may also result from suppliers fulfilling orders that were left unfulfilled following last year’s COVID-19 delays.
Exports increased 14.8% in March compared to last year’s month, shocking analysts who had projected a 7.0% dip in a survey.
However, researchers said the increase was more likely caused by exporters rushing to complete a backlog of orders that the epidemic had delayed in previous months, and they cautioned that the outlook for global demand remained dim.
The COVID-19 outbreaks in December and January probably decreased factory supplies. A leading economist stated that manufacturers have now caught up on backlog orders as they are operating at full capacity.”
“Given the poor global macroeconomic outlook, the strong export growth is unlikely to sustain,” he added.
Meanwhile, imports decreased less than forecast, with economists attributing some support to a rise in the purchase of agricultural goods, particularly soybeans.
Imports dropped just 1.4 percent, less than the forecasted 5.0% reduction and the 10.2% contraction over the preceding two months.
A spokesperson of the General Administration of Customs attributed the positive surprise to the robust demand for lithium batteries, solar products, and electric automobiles. But he warned that things could get worse in the future.
He said, “The external environment is still harsh and challenging. “Slow external demand and geopolitical factors will bring greater challenges to China’s trade development,” he continued.
Other Asian exporters like South Korea and Vietnam, whose exports also fell in the first few months of 2023, contrast China’s robust success, raising questions about whether it can continue.
An economics expert said, “We aren’t convinced that this rebound will be sustained given the bleak outlook for foreign demand.”
The decline of Chinese exports still has some way to go before it hits bottom later this year, and most developed economies will enter a recession this year.
According to the country’s newly appointed premier, Chinese officials should “try every method” to increase commerce with developed economies, who urged companies to keep exploring developing market economies like those in Southeast Asia.
Since strong pandemic controls last year caused the economy to develop at one of its weakest rates in decades, Beijing has set a growth target for the GDP of roughly 5% this year. Last year’s GDP growth was merely 3%.