April trade slump highlights China slowdown

China's overall trade with the world slumped 10.9 per cent in April from a year earlier in the latest sign of the slowdown in what has been the world's fastest growing major economy for decades.

Chinese exports unexpectedly dropped 6.4 per cent last month year-on-year, while imports plummeted 16.2 per cent, according to customs data released on Friday.

Exports fell 15 per cent in March from a year earlier but most economists had predicted a strong rebound in April and Chinese state media had suggested an improvement in trade last month.

China's trade surplus, traditionally a source of tension with major trading partners like the US and Europe, increased sharply in April to $34.1bn from $3.1bn in March.

The Chinese economy grew by 7 per cent in the first quarter, its weakest quarterly performance since the height of the global financial crisis, and annual growth last year of 7.4 per cent was the slowest in 24 years.

Much of the slowdown has been concentrated in the previously overheated property sector, which has seen prices and sales transactions falling for more than a year.

Even before the property market peaked at the start of 2014, many of the industries that feed it - such as steel, cement and glass - were already suffering from chronic overcapacity.

With the downturn in new real estate construction projects gathering pace, Chinese producers are turning to overseas markets to sell their excess capacity.

In the four months to the end of April, Chinese steel product exports were up 33 per cent.

China's crude oil exports were up 500 per cent over the same period as growth in domestic energy demand slid along with a downturn in heavy industrial production.

A research paper published by the US Congressional Research Service this week highlighted that the size of the US's bilateral trade deficit was seen by some in Congress as a sign of unfair economic policies in China.

It pointed out that there were large discrepancies between the two countries' estimates of the size of the bilateral trade imbalance.

According to the US, its 2014 bilateral trade deficit with China was $342.6bn but according to China, its trade surplus with the US was $237bn or $105.6bn less.

The main reasons for the difference were the fact that China does not determine the final destination for exports trans-shipped through a third location, usually Hong Kong, and differences in the list value of shipments when they leave China and when they enter the US.

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