China's March imports rise at fastest pace in more than four years on stronger domestic demand

Domestic demand improvement helped China's import growth continue to rise at a double-digit pace in March. On April 14, the General Administration of Customs of China released trade data for March. Accordingly, imports rose 27.8% year-on-year to nearly $270 billion. This pace exceeded forecasts and was the strongest increase since November 2021. The report extends the trend of accelerated import growth this year for China, helped by improving domestic demand, rising commodity demand, and firms restocking inventories. In the first two months of the year, imports rose nearly 20%. This is an optimistic signal for the goal of boosting domestic consumption in China. For many years, economists have urged the country to shift from growth models dependent on investment and exports to one based on breakthroughs in consumption. In the five-year plan announced last month, Beijing also pledged to significantly increase household consumption. Meanwhile, exports in March rose only 2.5% year-on-year to $321 billion. This activity was mainly affected by conflicts in the Middle East. Over the past month, clashes related to Iran, the US and Israel have nearly blocked the Hormuz Strait, threatening global energy supply and disrupting shipping routes. Brent crude oil remains above $90 per barrel, up from around $60 before the conflict. Fuel and insurance costs have pushed freight costs higher. The need to take a longer route via the Cape of Good Hope has also reduced transport capacity. Disruptions in supplies of petrochemicals and fertilizer have increased risks to industrial and agricultural production. Spokesperson Lu Daliang of the General Administration of Customs said the Middle East conflict has kept fuel prices high over a long period, significantly increasing the cost of transporting oil. The current momentum has spilled over into the global supply chain, pushing up production and logistics costs of goods worldwide, thereby pressuring global merchandise trade. "Our data shows that in March, China's trade with the Middle East shifted from growth to contraction. We hope all parties will act to cool the situation as soon as possible, restore peace and stability at the Hormuz Strait as well as the Middle East," he said. — Hà Thu (theo SCMP, CNBC)