09.05.25 - China export surprise

China’s exports rose by 8.1% year-over-year in April (in USD terms), significantly surpassing the consensus forecast of 1.9%. The upside surprise was driven by strong shipments to Southeast Asia and Europe, which surged by 21% and 8% respectively.

In contrast, exports to the US slumped by 21% as newly imposed tariffs began to take effect, according to customs data released today.

On the import side, volumes edged down just 0.2%, beating expectations for a much steeper 5.9% drop, suggesting a more resilient domestic demand than anticipated.

Meanwhile, US and Chinese trade officials are set to meet this weekend in Switzerland to explore options for de-escalating the ongoing trade conflict.

Markets: China stock indices were slightly positive this morning following the numbers’ release.

My view: Overall, I remain constructive on China. At this stage, it’s not surprising that the stronger-than-expected economic data has had limited impact on markets. Investor sentiment remains cautious, with most participants in a wait-and-see mode as the outcome of the trade conflict between the two largest global economies remains uncertain.

My portfolio maintains a significant allocation to Chinese equities, although I trimmed exposure slightly ahead of the sharp market correction in early April. Since then, I share the prevailing waiting stance, expecting a more favorable re-entry point going forward.

Become a member to access more valuable market updates like this.