Chinese trade growth was slower than expected in April. Exports, in yuan, expanded 14.3% on a year earlier or 8.0% in dollar terms according to official figures. The latter was below the 10.0% expansion expected by economists surveyed by MarketWatch. The yuan value of imports grew 18.6%, the slowest rate of growth in four months. The slowdown in both reflects the lower – but still positive – outlook for orders from Chinese managers, as outlined in Panjiva research of May 2.

Calculations based on China General Customs Administration data. Dotted line shows single month on a year earlier, solid line shows two month trailing total. Source: Panjiva

China’s export growth was broad-based, with shipments to most regions except Japan rising. Japanese-bound shipments dropped 15.3%, or 5.2% lower on a 3 month rolling average basis. The signing of the RCEP trade deal may help boost activity with Japan, although this is a longer-term fix. Among other major trade partners exports to the U.S. grew the most quickly with a 11.7% rise in April and 9.9% growth on a quarterly basis. That was the fastest rate of expansion in two years.

Chart shows change in three month trailing average exports from China on a year earlier, based on China General Customs Administration data Source: Panjiva

From a political perspective the figures may prove problematic. China’s imports increased by just 1.5%. The net result was a trade surplus for China with the U.S. that increased 18.2% to $21.3 billion. While the 12 month average is unchanged vs. a month earlier it comes as the two countries attempt to implement a “ 100 day plan” to reduce the U.S. trade deficit with China. That follows meetings between President Xi and President Trump, and is due to be completed by around the middle of July. By contrast China’s trade surplus with the rest of the world is now 36% below its peak of last July.

Chart compares monthly Chinese trade surplus with the U.S. (dotted line) of exports less imports to 12 month rolling averages. Calculations based on China General Customs Administration Source: Panjiva