China's exports swung back to growth in April after a short-lived drop in March, continuing to prove a driver for the world's second-largest economy as it struggles to revive domestic demand.

Outbound shipments rose 1.5% in April from a year ago, reversing from a 7.5% drop in March, the General Administration of Customs said Thursday. The result topped the 1.0% growth expected by economists polled by The Wall Street Journal.

"Exports have been the bright spot in China's economy so far this year," said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

The revival of manufacturing and exports helped the Chinese economy beat market expectations with a 5.3% expansion in the first quarter from a year earlier.

But concerns remain over how Chinese leaders will resolve the protracted property slump that has been holding back consumption and dampening investment.

The latest trade data showed tentative signs of recovery in domestic demand. Imports rose 8.4% from a year earlier, swinging from a 1.9% drop in March and also beating the 4.5% increase expected by economists in the WSJ poll.

China's trade surplus widened to $72.35 billion in April from $58.55 billion in March.

Chinese leaders signaled in a Politburo meeting late April that the government will take steps to digest piled-up housing stocks, which could stimulate demand. More Chinese cities in the past days have also either eased or removed home-purchase restrictions originally put in place years ago to rein in real-estate market bubbles.

But many economists think more forceful action is needed to reverse the real-estate slump. China's export strength could also prove to be a double-edge sword on the geopolitical front.

Continued exports strength risks aggravating concerns abroad about a flood of Chinese goods in foreign markets. Officials from the U.S. and European Union have said they could raise trade barriers for Chinese electric vehicles and renewable-energy equipment.

Overcapacity has helped fuel the recent strength in exports by pushing down export prices, said Zichun Huang, China economist at Capital Economics.

But with manufacturers' profit margins already squeezed, their ability to slash prices is fading, and export prices could be bottoming out, she wrote in a commentary.

"We expect exports to drop back further over the coming months," CE said.


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(END) Dow Jones Newswires

05-09-24 0113ET