China gets a hand up from US strength

<p>Kia ora,</p><p>Welcome to Monday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news China's recovery is now being aided by the recovering US economy.</p><p>In China, a <a href="https://www.markiteconomics.com/Public/Home/PressRelease/696d5d363eef424192d9a2783dd092eb" target="_blank"><strong>private survey</strong></a> of their services sector brought some better news for them, and better than the <a href="http://www.stats.gov.cn/tjsj/zxfb/202104/t20210430_1816900.html" target="_blank"><strong>official survey</strong></a>. Their services sector is expanding more vigorously than the tame levels we have seen recently. This is more like other international results, and China's service sector steeper increase is based on its strongest upturn in sales for five months. A quicker rise in employment is also helping to ease capacity pressures. And like other surveys, these improvements come at the same time costs are rising much faster than we have seen for months, even years.</p><p>Chinese <a href="http://www.customs.gov.cn/customs/302249/zfxxgk/2799825/302274/302275/3657556/index.html" target="_blank"><strong>exports also rose</strong></a> an impressively, up a sharp +9.5% in April from March and up +31% year-on-year. That is better than expected; the world is buying. But their imports fell -2.8%, and one reason is they are finding it <a href="https://www.yuantalks.com/chinas-semiconductor-imports-slipped-in-april-from-record-high-amid-global-shortage/" target="_blank"><strong>hard to buy semiconductor chips</strong></a>. They are also not buying coal. In fact coal imports dropped -20% in April from March and -30% less than a year ago. They ran a +US$28.1 bln surplus with the US in April, and not down noticeably from previous months as American demand recovers strongly. This same data records a trade deficit with New Zealand, and a -US$9.6 bln deficit with Australia in A