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China trade falls short of expectations in April

China trade falls short of expectations in April

(10 May 2017 – China) April figures show that Chinese exports rose for the second consecutive month, however it was a slower rate.

Import growth was also smaller than expected as China's financial deleveraging begins to take its toll.

China's export growth almost halved last month in US dollar terms, growing eight percent year-on-year to US$180 billion (A$244 billion), but significantly down from a 16.4-percent rise in the previous month and short of market expectations of 10.4 percent.

Import growth also slowed faster than expected in April, rising 11.9 percent, down from March's 20.3-percent uptick.

The preliminary figures left the world’s second largest economy with a trade surplus of US$38 billion, which compared with forecasts for $35.50 billion, and above $23.93 billion in March.

Reasons for the growth slowdown were weaker inbound shipments of commodities such as iron ore and copper weakened, while exports failed to keep momentum due to a general cooling in demand for electronic gadgets.

Exports to the US market increased by 11.7 percent in April compared to 19.7 percent a month earlier, while shipments to the European Union rose four percent. The figures follow official and private surveys showing that factory activity expanded at a slower-than-expected pace in April, mildly concerning economists.

A shift to a tightening policy has impacted corporate firms in China, which is facing a credit crunch over the coming months. A shrinking domestic bond market and pressure on banks to clean up are leaving firms grappling to refinance US$130 billion of debt that comes due this year, and $248 billion more in 2018.

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