SHANGHAI (AP) — China’s exports plunged 22.6 percent in April from a year ago, the sixth straight monthly decline, the government said yesterday, while a torrent in bank lending meant to boost the economy lifted spending on factories and other fixed assets.
April’s decline in exports, to $91.9 billion, is bigger than March’s 17 percent drop and suggests China’s trade sector has yet to see much relief from the prolonged drought in demand brought on by the global downturn.
But there were some glimmers of positive news even in the trade figures. While exports of heavy machinery and other industrial equipment continue to fall, recent increases from the previous month in exports of clothing, shoes, plastics and other labor-intensive consumer goods suggest some recovery in demand, economists say.
American retailers have begun ordering to restock low inventories, amid signs that consumer spending may be stabilizing, Jing Ulrich, chairwoman for China equities at JPMorgan said in a note to clients.
“Nevertheless, operating conditions for Chinese exporters willremain challenging for some time,” Ulrich said, noting that order sat the recent spring trade show in southern China’s Guangdong fell 17 percent compared with the autumn show.
Demand for imports remains weak. Imports fell 23 percent to $78.8billion, the Customs Administration reported, putting China’s trade surplus for April at $13.1 billion. That compared with an $18.6-billion surplus in March.
Meanwhile, China’s investments in factories and property development jumped 30.5 percent from a year earlier in the first four months of the year to 3.71 trillion yuan ($543.2 billion),thanks to a slew of bank loans for government stimulus projects.
The growth rate was 1.9 percentage points higher than inJanuary-March, the National Statistics Bureau said. China’s banks issued about 5.2 trillion yuan ($757 billion) in new loans in January-April of this year, heeding government orders to finance infrastructure projects aimed at boosting employment and stimulating demand.
The surge in investment reflects that trend. But a two-thirds drop in new lending in April compared with March, to 591.8 billion yuan ($86.6 billion), suggests that spending may moderate in coming months as the economy absorbs the huge inflows.
Investment in the private sector remains relatively weak, economists say, and concern is mounting over potential risks of bad debt and waste from excess investment in factory capacity and other projects.