China exports rebound, imports warn of fragility

Bloomberg

China’s exports rebounded after the Lunar New Year holiday amid a pickup in trade talks optimism, while a continued slide in imports underscored the fragility of the domestic economy.
Exports jumped 14.2 percent in March from a year earlier while imports fell 7.6 percent in dollar terms, the customs administration said.
That left a trade surplus of $32.65 billion, with the bilateral surplus with the US rising to $20.5 billion in the month from $14.7 billion in February.
China’s more upbeat sales abroad are a tentative sign of resilience in the global economy amid further signs of trade tensions, though the data would have been heavily influenced by seasonal and price factors.
The continued slump in imports though suggests a bumpy road ahead for the domestic economy as it seeks a rebound from a bruising few quarters.
“We still expect the first quarter marks the low point with more stimulus to filter through,” said Patrick Bennett, head of macro strategy for Asia at Canadian Imperial Bank of Commerce in Hong Kong.
“Global demand looks OK based on these numbers and central banks’ less restrictive stance will help.”
Data published shortly after the trade numbers showed credit growth also rose more than expected in March, a positive sign for the recovery. Aggregate financing was 2.86 trillion yuan ($426 billion) last month, compared with about 700 billion yuan in February, the People’s Bank of China said. The median estimate was 1.85 trillion yuan in a Bloomberg survey.
“Stimulus efforts are bearing fruit,” said Katrina Ell, an economist with Moody’s Analytics in Sydney. “We expect to see a broader pickup in activity taking place from the June quarter.”
The yield on China’s 10-year government bonds extended its increase after the data was released, rising 6 basis points to 3.34 percent, the highest level this year. Futures contracts on the notes slid for the first time in three days.
The moves indicate traders are pricing in stronger risk appetite and less monetary easing.