China
China's export growth slowed in April and the trade surplus was little changed, giving the government room to maintain a slower pace of yuan gains.
Overseas sales rose about 21.8 percent from a year earlier, after gaining 30.6 percent in March, according to calculations by Bloomberg News based on data released by the Ministry of Commerce today. The trade surplus was about $16.8 billion, almost unchanged from $16.7 billion a year earlier.
Central bank Governor Zhou Xiaochuan said on May 4 that weaker export growth has been a factor in the yuan's failure to appreciate versus the dollar after a 4.2 percent jump in the first quarter. The government is concerned that inflows of cash from exports will fuel 11-year high inflation and the overheating of the world's fastest-growing major economy.
“Exports will slow further in the second half as the weaker demand in the U.S. and other markets becomes more pronounced,'' said Liao Qun, chief economist at Citic Ka Wah Bank in Hong Kong. “China won't want the yuan to appreciate too fast for this reason.''
The trade surplus was more than the $15.5 billion median forecast of 19 economists in a Bloomberg News survey. Economists expected exports to rise 20.3 percent. The gain in overseas shipments compares with the 21.4 percent pace in the first quarter and the 26 percent increase for all of last year.
Imports grew about 26.1 percent in April from a year earlier after gaining 24.6 in March, the calculations showed. The increase partly reflects rising commodity prices.
Currency Gains
The world's fourth-biggest economy expanded 10.6 percent in the first quarter from a year earlier and inflation accelerated to 8 percent, the fastest pace since 1996 advance america cash advance.
Gains by the yuan quickened in the quarter to the fastest since a fixed-exchange rate was scrapped in 2005. A stronger currency makes products more expensive in overseas markets and cuts import costs. Since April, the appreciation has slowed, with the currency only climbing 0.18 percent against the dollar.
Growth in shipments from China to the U.S. has cooled this year as a housing slump threatens to trigger a recession in the world's biggest economy. A weaker global expansion has dimmed the outlook for the rest of the year.
Food Costs
Inflation, driven by food costs, climbed to an 11-year high of 8.7 percent in February, more than the central bank's target for the year of 4.8 percent. Consumer prices rose 8.2 percent in April, according to a Bloomberg News survey of economists. That number will be released on May 12.
Producer prices rose 8.1 percent in April, the fastest pace in more than three years, the statistics bureau said today.
Export growth “will continue to trend down in months to come as the global economic downturn unfolds,'' said Sun Mingchun, an economist at Lehman Brothers Holdings Inc. in Hong Kong. “It could even fall below 10 percent in the fourth quarter.''
Bloomberg's calculations are based on Ministry of Commerce data for shipments of mechanical and electrical products for the first four months, released on a ministry Web site today. The ministry said exports of those products represented 59.2 percent of total exports and imports of the goods were 47.3 percent of total imports.