China April imports, exports grow strongly

[May 10, 2010]  BEIJING (AP) -- China posted more double-digit trade growth in April in a positive sign for its recovery, but analysts said Beijing is unlikely to move quickly to let its currency rise because global demand still is too weak.

Imports jumped 49.7 percent over a year earlier to $118.2 billion, while exports surged 30.5 percent to $119.9 billion, the official Xinhua News Agency said Monday. China's trade surplus rebounded to $1.7 billion from March's $7.2 billion deficit, its first in six years.

The jump in demand for foreign raw materials and consumer goods added to signs China's stimulus-driven recovery from the global slump is powering ahead after first-quarter economic growth soared to 11.9 percent.

"This shows the Chinese economy is on its way to recovery, driven by domestic demand," said economist Lu Zhengwei at Industrial Bank in Shanghai. "External demand is just so-so. The world recovery is pretty flat."

Global demand is still too weak for Beijing to take any immediate steps to ease politically volatile exchange rate controls, said economist Liu Qiyuan at China Merchant Securities in the southern business hub of Shenzhen.

Beijing has kept the yuan frozen against the dollar since late 2008 to help its exporters compete abroad. Analysts expected Chinese leaders to allow a gradual rise by the middle of this year to ease stresses in their economy but say that probably was postponed due to turmoil over the Greek debt crisis.

"I don't think last month's surplus will lead to an immediate appreciation. After all, trade hasn't recovered to a very good level," Liu said.

Some American lawmakers want sanctions if Beijing fails to act on currency but President Barack Obama has been conciliatory lately, possibly hoping Chinese leaders will move if they do not appear to be giving in to foreign pressure.

Liu said that Beijing still might let the yuan rise if global prices of industrial raw materials increase. A stronger yuan would help Chinese companies by making imported oil and other materials cheaper to buy with Chinese currency.

"With prices of raw material imports rising, there's a possibility for the yuan to appreciate in the latter half this year," Liu said.

China's import growth has little direct impact on the United States and other Western economies because a big share of its imports are oil, iron ore and other raw materials and industrial components from other Asian countries.

Chinese leaders have warned that despite the domestic rebound, the global outlook is still uncertain and export industries are vulnerable.

China has benefited from a modest rebound in U.S. demand, which pushed up American imports by 1.7 percent in February, the latest month for which data have been reported.

[Associated Press; By JOE McDONALD]

Associated Press researcher Bonnie Cao contributed to this report.

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