Exports in China unexpectedly fell 15% in March, a striking miss as economists largely predicted gains of 10% or more. A key reason for the slide is the strengthening of the yuan, which has appreciated 14% since the middle of last year against an index of several global currencies. China’s central bank has so far been reluctant to weaken the yuan, which it pegs to the U.S. dollar, seemingly concerned more about accelerating capital outflows.
Chinese exports, data showed, did fare better for the first quarter of the year, climbing 4.7% compared to last year’s Q1. Imports, however, fell 17.6% for the quarter, another sign of China’s lower-growth economy. In fact, China just recorded its lowest Q1 rate of growth in six years, according to figures released this week by the country. China’s statistics bureau revealed that the nation’s gross domestic product rose 7% in the first quarter of 2015 versus a year ago. The figure was in line with economic forecasts based on a number of indicators for the country, including unmet expectations for retail sales and power output.
Sheng Laiyun, spokesman for China’s National Bureau of Statistics, cited “the subsiding of traditional drivers” for the result, but refused to sound the alarm about the state of China’s economy. “The risk of the Chinese economy having a ‘double dip’ or a ‘hard landing’ is very small,” he told reporters, according to Reuters.
Following this week’s data release, the Chinese government has revamped its official growth target this year to 7%. The number would be the smallest annual rate of growth in 25 years.