Imports Rebound More Than Forecast, Export Growth Back In Positive Territory

China trade figures for April saw export growth rise 1.5% y/y, close to expectations (1.3%), but comfortably above the prior month's -7.5% pace. Imports were stronger than forecast though, up 8.4% y/y (4.7% forecast and -1.9% prior). The trade surplus was below expectations, printing at $72.35bn, largely due to the import beat.

• The first chart below overlays y/y export growth against CNY NEER y/y changes. There is a modest divergence, where the NEER looks too strong in y/y terms relative to the export trend but it is modest by historical standards.
• The authorities may continue to guard against the pace of yuan depreciation pressures rather than accept a sharp fall in the hope it boosts exports. Such a move may only raise competitiveness concerns with some of China's key trading partners.
• The export trend is expected to remain on a recovery path this year per the latest from our policy team (see this link).

Fig 1: CNY NEER Versus Export Growth Y/Y

Source: MNI - Market News/Bloomberg

• On the import side, the y/y print took us back towards earlier 2024 highs. It should, at the margin, give some confidence that the domestic demand backdrop is not faltering aggressively.
• The second chart below plots aggregate import growth against the y/y change in spot commodity prices.
• In terms of commodity import volumes, we saw gains for coal (+9.35%m/m) and iron ore (+1.1%m/m), but crude oil fell by 8.8% m/m. Natural gas import volumes were down a touch, but most other commodities were higher.

Fig 2: China Imports Y/Y & Global Spot Commodity Prices Y/Y

Source: MNI - Market News/Bloomberg