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China trade with world surges as demand recovers from COVID-19, but growth slows

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China’s trade with the United States and the rest of the world surged by double digits in April as consumer demand recovered, but growth appeared to be slowing.

Global exports rose 32.3% over a year ago to $263.9 billion, in line with March but down from the explosive 60.6% rise in the first two months of 2021, customs data showed Friday. Imports increased 43.1% to $221.1 billion, accelerating from March’s 38.1% expansion.

China’s trade gains look especially dramatic due to comparison with a year ago, when global economies shut down to fight the coronavirus. Forecasters say growth is flattening out once that distortion and seasonal fluctuations are taken into account.

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Despite the jump in April’s headline figures, exports are levelling off “and the rebound in imports stalled,” Julian Evans-Pritchard of Capital Economics said in a report. “Demand is probably close to a cyclical peak.”

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The trade outlook is overshadowed by a tariff war with Washington and surveys that show April growth in export orders weakened. U.S. President Joe Biden has yet to say what he might do about reviving talks aimed at ending the trade war.

On the domestic front, economic output in the three months ending in March grew only 0.6% from the previous quarter, showing China’s explosive rebound was abruptly slowing. That suggests growth in Chinese demand for iron ore, consumer goods and other imports will cool.

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Chinese manufacturers of smartphones, cars, consumer electronics and other goods also are hampered by global shortages of processor chips as industries revive following the pandemic.

April exports to the United States rose 30.8% over a year ago to $42 billion despite tariff hikes that stayed in place after Beijing and Washington agreed to a truce in their trade war last year. Imports of American goods rose 23.5% to $13.9 billion despite Chinese tariff hikes.

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China’s global trade surplus narrowed by 5% to $42.8 billion, a sign Chinese demand is recovering faster than in the rest of the world. Its politically volatile surplus with the United States widened by 33.4% to $28.1 billion.

Exports to the 27-nation European Union rose 23.9% over a year ago to $39.9 billion while imports gained $43.3% to $26.8 billion. China’s trade surplus with Europe narrowed by 3% to $13.1 billion.

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Exporters benefited from the early reopening of China’s economy and demand for masks and other medical supplies while some governments are re-imposing anti-virus curbs that limit business and trade.

The latest Chinese import figures also are inflated by the rise in global prices for iron ore and other commodities. That can make imports look bigger while the amount of goods holds steady or declines.

In the four months through April, Chinese exports jumped 44% over a year earlier to $973.7 billion. Imports rose $31.9 billion to $815.8 billion.

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