China pauses on rates

China left its benchmark lending rates unchanged on April 20, extending a pause in monetary easing even as growth leans heavily on exports. (cnbc.com) The People’s Bank of China held the one-year loan prime rate at 3.0% and the five-year rate at 3.5% for an 11th straight month. The one-year rate guides most new business and household loans, while the five-year rate is the reference for many mortgages. (cnbc.com) The hold came four days after China reported first-quarter gross domestic product growth of 5.0% from a year earlier, up from 4.5% in the fourth quarter of 2025. First-quarter output reached 33.42 trillion yuan, and quarter-on-quarter growth was 1.3%. (stats.gov.cn) That headline growth was uneven. March retail sales rose 1.7% from a year earlier, industrial output grew 5.7%, fixed-asset investment increased 1.7% in the first quarter, and real-estate investment fell 11.2% through March. (cnbc.com) China’s statistics bureau said on April 16 that the economy still faced an “acute” imbalance between strong supply and weak demand. The same release showed March unemployment at 5.4%, up from 5.3% in February. (cnbc.com) Trade data point in the same direction. China’s customs agency listed January-March 2026 trade releases this month, after exports in the first two months of the year had surged 21.8% before slowing to 2.5% in March as energy and shipping costs climbed. (english.customs.gov.cn) (cnbc.com) The export push follows a record 2025 trade surplus of $1.2 trillion. Bloomberg, cited by Moneycontrol, reported that exports to Africa rose 26% last year, shipments to the Association of Southeast Asian Nations grew 13%, and exports to the United States fell 20%, leaving the U.S. share of China’s exports at 11%. (moneycontrol.com) Imports tell a softer story about demand at home. China Customs said imports fell 6.0% in the first quarter of 2025 and 0.2% in the first three quarters of 2025, even as exports kept rising over those periods. (english.customs.gov.cn 1) (english.customs.gov.cn 2) Beijing has more reason to wait now than it did a year ago. Factory-gate prices rose 0.5% in March, consumer inflation was 1.0% in March after 1.3% in February, and central bank governor Pan Gongsheng warned last week that geopolitical tensions and trade barriers were weighing on global growth. (cnbc.com) For now, China’s economy is still hitting its growth target range of 4.5% to 5% for 2026. The question after April’s rate decision is whether export-led output can keep carrying an economy where consumption, property and import demand remain weaker than the headline numbers suggest. (cnbc.com 1) (cnbc.com 2)