By Ambar Warrick
Investing.com -- China logged a better-than-expected trade surplus in March, data showed on Thursday, aided largely by an unexpected rebound in exports on an improvement in overseas demand, while imports also contracted less than expected.
China’s exports grew 14.8% in March from the prior year, bucking expectations for a drop of 7%, and recovering sharply after a 6.8% fall in the prior month, data from the Customs Administration showed.
The reading, which saw exports break a four-month declining spree, comes amid some improvement in offshore demand for Chinese goods. But a bigger recovery is still expected to remain limited, amid worsening economic conditions across the globe.
Still, the improvement in exports saw China’s trade balance fall less than expected to a surplus of $88.19 billion in March, from a record high of $116.88 billion in February. The reading was much higher than expectations of $39.20 billion.
Chinese imports also fell a less than expected 1.4% in March from the prior year, compared to expectations for a drop of 5%, and February’s decline of 10.2%.
The better-than-expected trade data points to some improving prospects for the Chinese economy, as it reemerges from three years of anti-COVID disruptions. The manufacturing sector, which is a bellwether for the broader economy, is likely to benefit from improvement in offshore demand.
Increased government spending, to shore up the economy, is also expected to help support growth in the coming months, after the government vowed to shore up domestic spending in the wake of a COVID-induced slowdown.
Recent data showed that Chinese new bank lending surged to a record high in the first quarter of 2023, marking a post-COVID recovery as low interest rates and government measures to support spending spurred credit growth.
But other facets of the economy have still remained laggard. The manufacturing sector barely expanded through the past month, indicating that an economic recovery has remained uneven since the lifting of anti-COVID lockdowns.
Chinese inflation data also read much weaker than expected for March, showing that domestic spending remained weak despite government measures.