China's exports in March returned to growth for the first time in nine months, adding to further signs of stabilisation in the world's second-largest economy. But as David Pollard reports, there are still of signs of weakness in the global economy.
With confidence teetering on the edge, markets are desperate for signs of recovery in China. New trade data might just be that. Chinese exports rose in March - for the first time in nine months - and fast. Most imports are down - except, importantly, commodities. Copper imports show a record monthly high - a sign, perhaps, domestic demand is returning too. (SOUNDBITE) (Mandarin) CHINA'S GENERAL ADMINISTRATION OF CUSTOMS SPOKESMAN, HUANG SONGPING, SAYING: "Import and exports this year are expected to improve on measures put in place with joint efforts from all sides.... Thank you." Market reaction was less restrained. Key stock indices hit 3-month highs - the yuan also up. But the data could be distorted by China's New Year holidays, say economists. And euro zone industrial production numbers still point to weakness there. That, coming hard on the heels of Tuesday's IMF downgrades to the euro zone, as elsewhere. SOUNDBITE (English) SENIOR FX STRATEGIST, RABOBANK, JANE FOLEY, SAYING: "If global growth does slow down, there isn't too much scope to reduce interest rates in many countries in order to try and boost inflation and growth further ... Given the constraints in both fiscal policy and monetary policy for many countries, I think the IMF is right to be very cautious in its outlook." In another swipe to confidence, Germany's leading economic institutes could be readying with downgrades too. Reports suggest this year's growth outlook for Europe's largest economy will be cut to 1.6 per cent from 1.8 when they publish on Thursday.