UPDATE 2-China gets back to trade surplus, narrowly

* China posts $1.7 bln trade surplus in April

* Exports up 30.5 pct y/y, rise 11.4 pct from March adj

* Imports up 49.7 pct y/y, up 6.9 pct from March adj

* Economists had expected second straight trade deficit

* Data do little to ease Beijing’s worry about global
economy

* Chart: http://link.reuters.com/zeh43k

(Adds quotes, m/m growth figures)

By Langi Chiang and Lee Chyen Yee

BEIJING, May 10 (BestGrowthStock) – China returned to familiar
territory by posting a trade surplus in April, but exports only
narrowly topped imports, providing limited comfort for
policymakers fearful of another round of global economic
turmoil.

China recorded a $1.7 billion trade surplus last month,
defying expectations for a second straight deficit after
March’s $7.2 billion shortfall.

But if a trade surplus is the normal state of affairs for
the world’s largest exporting nation, the new normal could be
smaller surpluses, reflecting China’s growing domestic demand
and the relatively frail health of the world’s other major
economies.

Exports rose an annual 30.5 percent in April, topping
forecasts for 28.9 percent growth. Imports were up 49.7 percent
from a year earlier, compared with predictions for a 53.8
percent increase.

“Expectations for yuan appreciation will continue to exist,
but April’s strong export figure alone will not have a big
impact on timing,” said Sun Wencun, an economist with CITIC
Securities in Beijing.

China has frozen its currency against the dollar since
mid-2008, trying to cushion its exporters from the global
financial crisis.

Speculation had swirled in recent weeks that it was only a
matter of time before Beijing let the exchange rate resume
appreciation, but many analysts believe that international
jitters in the wake of Greece’s debt crisis could stay its
hand.

“These (trade) numbers largely pre-date the escalation of
the euro-area sovereign debt crisis and the sharp sell-off in
the euro, so it is still too soon to tell whether we will see
weaker European demand for Chinese exports in the months
ahead,” Brian Jackson, an economist with the Royal Bank of
Canada in Hong Kong, said in a note.

BACK TO SURPLUS

China’s leaders have said they want to be sure that
external demand has made a sustained recovery before unwinding
policies introduced at the height of the global credit crunch,
including the yuan’s de facto peg and a range of tax rebates
given to exporters.

But the world’s third-largest economy slipped into a trade
deficit in March — its first in six years — more because of
domestic vigour than external weakness.

With China growing 11.9 percent in the first quarter from a
year ago, its appetite for energy and raw materials has been
voracious.

April may prove something of an inflection point, with base
effects over the rest of the year likely to push export growth
rates higher, while the pace of import increases slows.

Exports rose 11.4 percent in month-on-month calendar
adjusted terms, while imports were up 6.9 percent, the Chinese
customs authority said.

Goldman Sachs economists Yu Song and Helen Qiao estimated
that on a seasonally adjusted annualised month-on-month basis,
exports grew around 25 percent and imports fell about 18
percent.

“We continue to believe the trade deficit (in March) was a
one-off event and the trade surplus will likely increase
throughout the year,” they said.

Grace Ng, an economist with J.P. Morgan in Hong Kong,
forecast that China would run a $100 billion trade surplus this
year, down from a $196 billion surplus in 2009.

“We’ve been saying that the March trade deficit was
temporary. We are looking for the full-year trade balance to
come back into a solid balance situation,” she said.

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UPDATE 2-China gets back to trade surplus, narrowly