China March trade data signals strengthening recovery
By Aileen Wang and Nick Edwards
BEIJING (Reuters) - China saw a mild trade deficit of $884 million in March as a forecast-busting 14.1 percent year on year surge in imports eclipsed export growth of 10 percent, signaling that domestic demand was gathering steam needed to drive economic recovery.
Customs Administration data on Wednesday showed import growth far in excess of the 5.2 percent expected, while exports fell just short of the 10.5 percent rise forecast in the benchmark Reuters poll.
That left China with a trade deficit, compared with a forecast surplus of $15.4 billion and February's surplus of $15.3 billion.
Haibin Zhu, chief China economist at JP Morgan in Hong Kong, said the surge in imports in March could help dispel a major concern over the strength of the domestic demand cycle prompted by weakness of import data in previous months.
"The stronger than expected import growth for March suggest this cycle is probably coming to a turning point," Zhu told Reuters. "If domestic demand turns out to be stronger than expected, it's definitely positive for the economic outlook."
Brent crude futures steadied above $106 per barrel and the Australian dollar hit a 2-1/2-month high after the data as investors cheered numbers that implied recovering domestic demand and strong appetite for commodity imports.
China's Commerce Ministry has pledged to unveil fresh measures this year to boost imports, chiming with Beijing's long-term goal of balancing its trade structure to pursue more sustainable growth by tilting the economy more towards domestic consumption.
A pair of surveys last week showed that stronger domestic demand helped China's factory activity to rebound in March, with new orders up sharply in a sign that the underlying economic recovery is strong enough to weather any risks from patchy external environment. Continued...