China's trade surplus slackens

China's trade surplus decreased slightly last month from a year ago amid declines in international trade growth triggered by the global economic slowdown.

Monthly surplus reached 16.68 billion last month, down 1.14 percent year-on-year but up 24.5 percent from 13.4 billion U.S. dollars in March, the General Administration of Customs said yesterday.

Exports in April rose 21.8 percent year-on-year to 118.71 billion U.S. dollars, while imports rose 26.3 percent to 102.03 billion U.S. dollars.

The sharp decline in April's export growth after a 30.6 percent rise in March should be seen as a return to the medium-term trend rather than a sudden weakening in China's exports, said Sun Mingchun with Lehman Brothers.

He said year-on-year growth of exports in March 2008 was abnormally strong given exports in March 2007 were extremely weak because exporters had frontloaded their shipments last February.

China's trade surplus has been narrowing since the government took measures to curb exports of resource-intensive and heavily polluting products and started to encourage imports from last year.

The World Trade Organization has predicted global trade growth will decline to 4.5 percent, 1 percentage point lower than last year. It could be the slowest rise since 2002.

"The global economy is facing more uncertainties this year given the possible shrinkage in US demand and inflationary pressures. Both these factors are expected to aggravate the global economic slowdown, further affecting trade," said Liang Yanfen, a researcher with the Chinese Academy of International Trade and Economic Cooperation.

"Slowing external demand may take more time to impact export growth, but the weakening trend is becoming more evident both in and outside the US. Higher commodity prices and currency appreciation would check the continued rise in trade surplus," said Ken Peng, a Citi analyst.

Export growth stayed robust at 21.8 percent but is under pressure as even Asian demand has started to slow, suggesting that a weakening in the final product markets is affecting upstream producers while imports continue to be supported by a stronger currency, high commodity prices and government controls over trade in food and resources out of inflation concerns, he said.

The country's trade surplus in the first four months narrowed to 57.99 billion U.S. dollars, 5.31 billion U.S. dollars lower than a year ago.

Exports in these four months amounted to 424.6 billion U.S. dollars, up 21.5 percent, or 6 percentage points less than a year earlier. Imports were 366.6 billion U.S. dollars, up 27.9 percent, or 8.8 percentage points more than a year earlier.

Realized foreign investment reached 35.02 billion U.S. dollars during the four months, up 59.32 percent year-on-year, the Ministry of Commerce said.