(Yicai) May 12 -- China’s foreign trade in goods scaled new heights last month as a rebound in trade with the United States, a strong showing in non-US markets, and high growth in exports of high-tech products helped to counterbalance the negative effects of the Middle East conflict.

Exports climbed just over 14 percent in US dollars terms to USD359.4 billion in April from a year earlier, Chinese customs data showed on May 9. Exports has risen 2.5 percent in March. Imports notched double-digit growth for a fourth month in a row, jumping 25 percent to USD274.6 billion. That was slower than the prior month’s 28 percent clip.

Even though this month’s exports still have a good chance of growing strongly, the drag from the Middle East conflict, together with emerging global growth pressures, means China’s export growth could slow sharply later on, Feng Lin, executive director of the research and development department at Golden Credit Rating International, told Yicai.

Exports to the US jumped 11 percent, following March’s 27 percent drop, while imports from the US rose 9 percent, up from 1 percent in March.

For the first four months of the year, however, trade with the US was still down in dollar terms, falling 10.4 percent. Exports declined 10.2 percent and imports dropped 10.9 percent.

April’s strong growth in shipments from the US was mainly due to a low base of comparison a year earlier, when the Trump administration imposed reciprocal tariffs. The temporary easing in China-US trade tensions also helped to stabilize imports from the US.

It remains to be seem whether last month’s rebound in US trade can last, because American consumer confidence remains weak and wholesalers have not shown any clear restocking momentum in durable goods, Yang Chang, chief expert at the Institute of Public Policy and Governance at Shanghai University of Finance and Economics, told Yicai

Middle East Impact

China’s trade with the Middle East has come under pressure since regional tensions worsened. Exports to the region slumped 41 percent in March from a year ago, dragging down overall export growth by 2.7 percentage points, Chinese customs data showed. That decline likely continued in April, according to Golden Credit Rating’s Feng, though positive factors compensated for that.

April’s double-digit surge in exports was also helped by the global investment wave in artificial intelligence, which lifted prices for chips, computer parts, and electronic components, boosting the value of outbound shipments, Feng noted.

At the same time, overseas restocking rose in response to the Middle East conflict, external demand remained firm, and China’s manufacturing upgrade continued to support exports of new energy vehicles and high-tech products, Feng added.

The conflict has driven a surge in global manufacturing inventory restocking, and China's imports and exports are expected to continue to thrive during the semiconductor upswing cycle, according to Xing Zhaopeng, senior China strategist at ANZ.

At USD322.7 billion, China’s exports to non-US markets were still strong last month on both a month-on-month basis and versus last year’s March to December average, indicating that demand outside of the US remains healthy, Yang at the Shanghai University of Finance and Economics pointed out.

Persian Gulf orders slumped in April because of the Middle East situation, Ding Yandong, trader focused on non-US markets, said to Yicai. But stronger South American orders offset the loss, leaving overall orders about 10 percent higher year on year.

AI Impact

AI-related demand continued to play a bigger part in China’s international trade last month. Though by volume integrated-circuit exports slowed to a 3.7 percent increase, by value they nearly doubled, Feng noted. Meanwhile, exports of data-processing equipment and parts also surged 47 percent.

Together these two high-growth categories likely accounted for almost half of the month’s total increase in exports.

Auto exports were another major support. Vehicle export volume rose more than 50 percent, gathering pace from March, while their value climbed 44 percent. High-tech exports posted a  39 percent increase by value, also up on the pro month, showing that industrial upgrading continues to support external demand.

The head of an auto parts company in the Yangtze River Delta told Yicai that since this year, the company's orders on hand have jumped by more than half, and the factory is working overtime to meet delivery deadlines.

Editor: Tom Litting