China’s March exports shrink 15 per cent in shock fall

Beijing: China’s export sales contracted 15 per cent in March while import shipments fell at their sharpest rate since the 2009 global financial crisis, a shock outcome that deepens concern about sputtering Chinese economic growth. The tumble in exports — the worst in about a year — compared with expectations for a 12 per cent rise, could heighten worries about how a rising yuan has hurt demand for Chinese goods and services abroad, analysts said.

In a sign that domestic demand was also tepid, imports into the world’s second-biggest economy shrunk 12.7 per cent last month from a year ago, the general administration of customs said on Monday. That was the biggest slump in imports since May 2009. “It’s a very bad number that was much worse than expectations,” Louis Kuijs, an economist at RBS in Hong Kong, said in reference to the export data. “It leads to warning flags both on global demand and China’s competitiveness.”

Buffeted by lukewarm foreign and domestic demand, China’s trade sector has wobbled in the past year on the back of the country’s cooling economy, unsettling policy makers. Chinese vice premier Wang Yang was quoted by Xinhua state news agency as saying that authorities must act to arrest China’s export slowdown lest it further dampens economic growth. He was quoted as saying that local governments should offer “preferential policy support” and encourage more private investment in exports.

Anaemic growth in the trade sector could hurt jobs, which the government wants to protect for fear that widespread unemployment could fuel social discontent and trigger unrest. So far, China’s labour market appears to be holding up well, despite signs that growth is steadily grinding to its lowest of around 7 per cent.