China's export‑led rebound

China left its benchmark lending rates unchanged in April after first-quarter growth came in at 5.0%, the top of its official target range. (usnews.com) (stats.gov.cn) The People’s Bank of China kept the one-year loan prime rate at 3.0% and the five-year rate, which guides many mortgages, at 3.5% on April 20. Reuters reported it was the 11th straight month with no change. (usnews.com) Trade was a big part of that stronger start. China’s goods imports and exports rose 15% from a year earlier in the first quarter to 11.84 trillion yuan, with exports up 11.9% and imports up 19.6%, according to customs data released April 14. (english.scio.gov.cn) The broader economy also showed a split between factories and households. Industrial output rose 6.1% in the first quarter, while fixed-asset investment rose 1.7%, or 4.8% excluding property, according to the National Bureau of Statistics. (stats.gov.cn 1) (stats.gov.cn 2) That mix helps explain why officials did not rush into a rate cut. Reuters said stronger growth and a pickup in inflation reduced the need for immediate broad easing even as credit demand had “yet to recover meaningfully,” in DBS’s words. (usnews.com) The weak spot remains housing. Real-estate development investment fell 11.2% in January through March from a year earlier, extending a long property slump that has weighed on construction and household confidence. (stats.gov.cn) Recent Chinese data show consumers are improving, but not at the same pace as trade and industry. The statistics bureau said the national economy got off to “a good start” in the first quarter, while separate releases still showed property investment shrinking sharply. (stats.gov.cn 1) (stats.gov.cn 2) For now, Beijing is getting enough growth from exports and manufacturing to hold rates steady. The question hanging over the next few months is whether domestic demand can do more of the work while the property downturn drags on. (usnews.com) (stats.gov.cn)