September 27, 2023

Chinese Exports Hit Record for April

HONG KONG — China’s exports surged last month to a record level, as Chinese factories appear to have passed on rising costs to buyers who are finding that they have few alternatives in other countries.

China’s imports lagged, causing its trade surplus to widen sharply from the first three months of this year, to $11.43 billion. That was lower than last year, but still high enough to increase trade frictions with the United States and other countries worried that China is using a weak currency to claim an unusually large share of global job creation as the world economy climbs out of the recent economic downturn.

China’s regularly scheduled release of trade statistics came in between two days of negotiations in Washington between senior American and Chinese officials. In the first day of talks on Monday, American officials pressed China to improve its human rights record and allow interest rates and the Chinese currency to rise, while Chinese officials called on the United States to lead a global economic recovery and suggested that their shrinking trade surplus should not be a big concern.

China’s General Administration of Customs said that exports rose 25.9 percent in April compared with a year earlier, to a record $155.69 billion, exceeding a previous record of $154.12 billion in December. The increase was somewhat surprising because the spring is traditionally a weak period for Chinese exports.

Chinese imports rose at a slower 21.8 percent, to $144.26 billion, as government policies took effect to restrict bank lending in an attempt to control inflation.

Labor costs are surging by 10 to 30 percent a year in China and commodity costs are rising around the world, leading to warnings by suppliers of Western retailers that price tags will start rising globally. Many companies are searching for alternatives to manufacturing in China, but finding that nowhere else offers China’s combination of a large labor supply, world-class highways and ports and strongly pro-business policies, including a strict ban on independent labor unions that tended to hold down wages until very recently.

Josh Green, the chief executive of Panjiva, a New York company that advises 3,000 corporate buyers of goods from Asia, said his clients were extremely worried about the pace of price increases that they face from Chinese suppliers.

“That’s all I’ve been hearing from them over the past year, is concern verging on panic about the changing cost structure in China,” he said. “That has led to the hunt for the next China, which is a fool’s errand.”

Executives at three Chinese exporters said Tuesday that despite strong retail sales in the United States in April, they had not yet seen a sustained uptick in American orders, even as orders have risen from Europe and emerging markets. One reason might be that these and other exporters are now steadily marking up their prices to reflect the gradual appreciation of the renminbi, which has climbed 5 percent against the dollar since last summer.

“I am not worried about the rise of the renminbi since our company makes an adjustment every three months in the exchange rate used in our contracts,” said Mabel Lee, the sales manager at the Foshan Summit Sanitary Ware Company, a maker of bathtubs of toilets based in Foshan, in southern China’s Guangdong Province.

Hilda Wang contributed reporting.

Article source:

Speak Your Mind