May 21, 2024

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China’s exports have been hit by a sudden surge in the electric car boom

China’s exports have been hit by a sudden surge in the electric car boom

BEIJING (Reuters) – China’s exports rose unexpectedly in March, boosted by strong shipments of solar energy products, new energy vehicles and lithium batteries and as supply chain conditions continued to improve from the coronavirus paralysis.

Meanwhile, imports fell less than expected, as economists pointed to an acceleration in purchases of agricultural products, particularly soybeans, as evidence of some support.

Exports in March jumped 14.8 from a year ago, after five straight months of declines and much better than the 7.0% drop analysts had expected. Imports fell just 1.4%, below expectations for a 5.0% decline and a 10.2% contraction in the previous two months.

While the numbers provide some relief to investors worried about the health of the world’s second-largest economy, analysts suspect the strength can continue as demand picks up in major economies elsewhere.

“Chinese export growth picked up in March. It came as a surprise to the market,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management. He added that “the positive surprise may have been due in part to the lower underlying impact – the outbreak of COVID in March last year shut down many factories.”

Lv Daliang, a spokesperson for the General Administration of Customs, attributed the upward surprise to the surge in demand for electric vehicles, solar energy products and lithium batteries.

However, be warned that conditions may get worse in the future.

“The external environment is still harsh and complex at present,” Lv told reporters in Beijing on Thursday. “Slowing external demand and geopolitical factors will bring greater challenges to China’s trade development,” he added.

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Newly appointed Premier Li Qiang said at a cabinet meeting last week that officials should “try every method” to grow trade with advanced economies and push companies to further explore emerging market economies, such as those in Southeast Asia.

China has set a growth target of around 5% for gross domestic product this year, after tight controls over the pandemic last year sent the economy to one of its slowest rates in decades. Last year, GDP increased by only 3%.

(Reporting by Joe Cash and Elaine Zhang); Editing by Clarence Fernandez and Sam Holmes

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