HONG KONG — Trade figures for April released by the Chinese government on Wednesday morning were slightly better than economists expected, but still indicated that demand was fairly weak in foreign markets and in China itself.

Exports and imports both increased last month compared with a year earlier, but the figures were harder than usual to interpret because April of last year was so weak. Imports and exports all but stopped growing in April of last year as a wide range of industries, perceiving a short, sharp domestic economic slowdown that would last until early autumn, stopped buying industrial commodities, even as foreign buyers cut orders as well.

Compared with that weak base, China’s trade figures for last month looked somewhat better. Exports rose 14.7 percent from a year ago, while imports increased 16.8 percent.

But the trade figures were far from strong enough to suggest that foreign demand could pull China out of what seems to be a deepening economic malaise. Although official figures still show the economy steaming along at a growth rate of nearly 8 percent, a range of purchasing manager surveys last month showed growing worry among business executives across China.

“China is in a very difficult position now,” as American and European consumers seem wary of further increases in the coming months in their purchases of Chinese goods, said Diana Choyleva, an economist in the Hong Kong office of Lombard Street Research, an economic analysis firm.

The discouraging shift in sentiment, after a fairly weak economic performance in March as well, comes despite enormous lending through the autumn, winter and early spring. China’s leaders were able to turn the sharp economic slowdown a year around by flooding the economy with bank and trust loans, and other credit.

But the heavy lending has brought about considerably less economic growth than earlier rounds of monetary easing, raising worries that China’s investment-dominated economy is running out of economically viable projects to pursue and may not be able to shift quickly enough to consumer-led growth.

China has scheduled the release of April inflation data on Thursday, and a wide range of April economic statistics next Monday, including including industrial production, fixed asset investment and retail sales.

Another uncertainty about Wednesday’s trade data lies in whether the export figures are even accurate, or whether they have been artificially inflated. A gradual rise in the value of the renminbi against the dollar over the last year, together with expectations that this rise will continue, has created an incentive for exporters to overstate the value of the goods they ship out of the country, as a way to bypass China’s currency controls and bring more dollars into the country to convert into renminbi.

The Chinese government has opened an investigation into whether exporters are overinvoicing clients, after export data in the first quarter showed unusual patterns, including a surge in reported Chinese exports to Hong Kong that did not match Hong Kong data.

Louis Kuijs, an economist in the Hong Kong office of the Royal Bank of Scotland, estimated that overinvoicing of exports accounted for more than half of the year-on-year growth in China’s exports last month. By adjusting for this, he said that the true growth in China’s exports last month appeared to be more like 5.7 percent than 14.7 percent.

 There has been little sign of manipulation of import figures, which appear to show that domestic demand is holding up a little better than overseas demand.

Article source: http://www.nytimes.com/2013/05/08/business/global/china-trade-figures-rise-slightly-but-weaknesses-persist.html?partner=rss&emc=rss