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Mitul Kotecha, senior emerging markets strategist at TD Securities, notes that the Chinese exports were weaker than expected in April (-2.7% y/y, market 3.0%) while imports were stronger (4.0% y/y, market -2.1%), yielding a much smaller trade surplus than expected ($13.84bn, market $34.56bn).

Key Quotes

“The rebound in imports after 4 month of decline (in y/y terms) will likely be seen as further evidence of China’s economic stability. Weaker exports largely reflected a drop in demand from the US.”

“China’s trade surplus with the US was $21.0bn, with exports dropping by -13.1% y/y and imports falling -25.7% y/y. The trade surplus with the US remained elevated at $327.5bn (12m sum), close to record highs, a fact that will likely not go unnoticed in trade talks tomorrow and Friday.”

“Imports from Asia picked up over the month, but exports to every country in Asia dropped (m/m). Indeed, the data appears to add to evidence that China’s growth stability is not being echoed by demand from elsewhere in the region, with higher exports only to Malaysia, Philippines and Taiwan (y/y).”