May 11, (THEWILL) – China’s trade surplus rose to $90.21 billion in April, according to data by CNY News published Tuesday.
The news outlet, which also publishes the USD/CNY exchange rate, stated that the rise in China’s trade figures occurred despite the recent drop in the Yuan.
The overall outlook was that China’s export exceeded its import as some analysts had predicted in the first quarter that a trade surplus of $90 billion was most likely.
“The biggest CNY news was the latest trade numbers from China. According to the statistics agency, the country’s exports rose by 8.5% in April after jumping by 14.8% in the previous month. That increase was better than the median estimate of 8.0%.”
“Meanwhile, China’s imports dropped at a faster pace than expected. In all, exports dropped by 7.9% in April, which was worse than the median estimate of 5.0%. It was also worse than the previous decline of 1.4%. As a result, China’s trade surplus jumped to $90.21 billion from the previous $88.19 billion.
“In all, China’s economy has recovered at a slower pace than what analysts were expecting. This is evidenced by the earnings report of leading American companies. Most of them like Estee Lauder and P&G have lamented that China’s recovery is happening at a relatively slower pace than what analysts were expecting,” the report stated.
The report said the USD/CNY exchange rate drifted upwards on Tuesday after the latest China trade numbers. The Chinese Yuan crashed to 6.9244, the lowest point since April 27th of this year. In all, the Yuan has fallen by over 3% from the highest level in March.
“If we look at the exports statistics, we’re seeing very significant and ahead-of-expectation strength coming out of the export sector. That’s counter to what we’re seeing particularly out of tech exports in Korea and Taiwan, and it’s very clear evidence that there’s not a lot of decoupling actually going on on the ground,” the report said, referring to a note by analysts at JP Morgan.
China exports much more than it imports and saves at a high rate rather than buying imports, thereby running large current account surpluses and capital account deficits. The extra money that China earns from abroad gets reinvested, among other places, in U.S. Treasuries
“One of the most controversial macroeconomic issues of this decade is the question of how China has run such massive trade surpluses and has accumulated so much in foreign reserves over the past 20 years,” said an American Economist, Sam Trachtman.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
