China flags. Picture: REUTERS
China flags. Picture: REUTERS

Beijing — China’s exports rebounded more strongly than expected in April after a surprise drop the previous month, suggesting global demand remains relatively resilient and providing a cushion to the economy amid a heated trade dispute with the US.

Imports in April also grew more robustly than expected, suggesting China’s domestic demand is holding up well, good news for policy makers looking to soften the blow from any trade shocks.

The headline readings came as the world’s two largest economies have threatened each other with tens of billions of dollars’ worth of tariffs in recent months, leading to concern that Washington and Beijing may engage in a full-scale trade war that could damage global growth and roil financial markets.

China’s April exports rose 12.9% from a year earlier, beating analysts’ forecasts for a 6.3% increase and snapping back from a 2.7% drop in March, which economists believe was heavily distorted by seasonal factors.

The heated row with Washington and threats of tit-for-tat punitive measures on trade and investment have added to the existing concern about an economic slowdown in China in 2018.

High-level discussions between the two sides in Beijing last week appeared to make little substantive progress in defusing tension apart from an agreement to hold more talks.

China’s top economic official will visit Washington next week to resume trade talks with the Trump administration, the White House said on Monday.

A Reuters report citing sources said China had offered to buy more US goods and lower tariffs on some goods, including cars.

The Trump administration has drawn a hard line, demanding a $200bn cut in the Chinese trade surplus with the US, sharply lower tariffs and advanced technology subsidies.

China’s trade surplus with the US widened to $22.19bn in April, from $15.43bn in March, according to Reuters calculations based on customs data released on Tuesday. For January-April, it rose to $80.4bn, compared with about $71billion in the same period of 2017.

China’s exports to the US rose 13.9% in the first four months of 2018 from a year earlier, compared with a 14.8% rise in January-March. Its imports from the US rose 11.6% in the same period.

Strong imports

China’s April imports also showed strong growth overall, suggesting its domestic demand remains resilient despite rising corporate borrowing costs and cooling property investment.

Imports grew 21.5% year on year, beating analysts’ forecast of 16% growth, and accelerating from a 14.4% rise in March. China’s imports of soybeans and crude oil rose in April from the previous month, although imports of iron ore and coal fell.

That left China with a trade surplus of $28.78bn for the month, compared with forecasts for a $24.7bn surplus in April and a rare deficit of $4.98bn in March.

That led to a wider surplus with the US in January-April of $80.4bn, according to China’s customs data. China’s trade surplus with the US in April alone was $22.19bn.