BEIJING: Chinese exports plunged more than expected last month, official figures showed on Friday, as the world’s second-largest economy struggles to sustain its post-pandemic recovery.

Shipments sank 7.5 per cent on-year, while imports shrank 1.9pc, the General Administration of Customs said.

A Bloomberg survey of economists had forecast exports to fall just 1.9pc and imports to rise 1pc.

The slump was “to a large extent… due to the fact that March this year has two working days less than March last year”, said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

“The working day effect distorts the picture, as it often does in the first quarter due to Chinese holidays.” He added that comparing Chinese trade over the first quarter of the year instead of a monthly basis “shows a reasonable story about external demand”.

US topples China as Taiwan’s largest export market

The government is trying to firm up slowing growth as global demand continues to show signs of weakness.

They are also battling deep-seated domestic issues ranging from a debt-battered property sector to high youth unemployment and low consumption.

Consumer prices narrowly averted falling into deflation territory last month in a rare bright spot for policymakers.

Beijing has set an annual GDP growth target of around five percent for this year, and quarterly growth figures are expected in the coming days.

US topples China

Meanwhile, the United States has topped long-time leader China as Taiwan’s main export market for four consecutive months due to a surge in demand for microchip products and AI technology, Taipei’s Finance Ministry said on Friday.

Self-ruled Taiwan is a microchip-manufacturing powerhouse, churning out the world’s most advanced silicon wafers necessary to power everything from e-vehicles and satellites to fighter jets and increasingly to power AI technology.

For two decades, its top export market has been China — which claims Taiwan as part of its territory — but December data from the Finance Ministry shows the United States topping the list for the first time since August 2003.

In December, Taiwan exported $8.49bn in products to the US, compared with $8.28bn to mainland China.

The trend continued through March, when US exports increased by 65pc to $9.11bn, a 6pc jump, while mainland China received $7.99bn.

Those figures exclude Hong Kong, which holds its own status as a customs territory. When combined with mainland tallies, China remains the top destination for Taiwanese goods.

A Finance Ministry official in the trade division attributed the recent US tilt to the global “reorganisation of electronics and ICT (information and communication technology) supply chains, and the popularity of the AI industry”.

Since Taiwanese President Tsai Ing-wen came to power in 2016, she has been working to strengthen economic ties with the United States, seeing Washington as a crucial partner as neighbouring China grows increasingly aggressive.

Published in Dawn, April 13th, 2024