Imports unexpectedly decreased in March as COVID-19 restrictions across vast regions of the country impeded freight arrivals and dampened domestic demand, while export growth slowed, leading economists to forecast a worsening of trade in the second quarter.
The weaker trade data are expected to fuel expectations for greater policy support from Beijing, with a government adviser asking for lower reserve requirements and interest rates to help the economy recover on Wednesday.
In March, inbound shipments dipped 0.1 percent from a year earlier, the first drop since August 2020, according to customs statistics released on Wednesday. In the first two months of the year, the stock rose 15.5 percent, compared to an 8 percent increase predicted by experts in a Reuters survey.
The drop was widespread. China’s crude oil imports fell 14% in March, and gas import volumes fell to their lowest level since October 2020. Copper purchases declined 8.8% as manufacturing output was hampered by COVID outbreaks, and industrial demand for other raw materials remained weak.
Exports, which are currently a primary driver of the economy, increased 14.7 percent in March, exceeding expert projections of a 13 percent increase, albeit at a slower pace than in January-February when they increased 16.3 percent.
“While the recent COVID-19 epidemic is to blame in part, demand-side movements played a bigger impact,” said Julian Evans-Pritchard, senior China economist at Capital Economics.
Imports are expected to continue poor, while exports are expected to drop more in the next quarter, he predicted.