Outlook - China Export Decline To Slow In March

飞雪寒冰

China’s March exports may still drop by double digits, but the rate of decline will slow, reflecting the initial impact of China’s 4 trillion yuan economic stimulus package and a revival in the economies of major trading partners, economists said.



According to Ha Jiming, chief economist at China International Capital Corp, March export orders rebounded from February.



February exports were down 25.7 percent year-on-year. Exports for the first two months were down 21.1 percent year-on-year, according to Chinese customs statistics. Export has been falling since November.



Ha noted that major customers for China’s goods, such as the U.S., are showing signs of a pickup. The U.S. import price index in March was up 0.5 percent, the first increase since July, the U.S. Bureau of Labor Statistics said. The index rose mainly due to a 10.5 percent rise in petroleum prices, itself an indicator of heightened economic activity.



China announced a 4-trillion yuan stimulus package in November to help the country recover from the global economic crisis. Ten manufacturing sectors were given extra support from this unprecedented cash injection as part of the revival plan.

飞雪寒冰

Yet some industries are still smarting. Steel – China’s fifth largest export - might drop by 80 percent, higher than the earlier forecast fall of 50 percent, said China Iron and Steel Association secretary general Shan Shanghua. Steel is one of the industries in Beijing’s revival plan.



According to Shan, China could have been a net importer of steel in March. The country has been net exporting steel since April 2006, at around two billion dollars each month. Net exports in 2008 peaked in August at US$7.5 billion.

Chinese Customs will release March export and import data on April 10.



Exports have contracted drastically from November and December’s drop of around 2 to 3 percent. They fell 17.5 percent in January and 25.7 percent in February.



Soon after February export data were released, the government raised tax rebates on 3,802 items in the 10 industries covered by the revival plan.

CITIC Securities chief analyst Zhu Jianfang said there is still room for raising tax rebates, by around 2 percentage points. Most rebates are now at around 15 percent.