China's April export figures disappoint

Figures show that Chinese exports fell more steeply than expected in April, overshadowing strength in capital spending and casting fresh doubt on how solid the prospects for recovery are in the world's third-largest economy.

Exports were down 22.6% last month from a year earlier, the government said. That was steeper than March's 17% decline and greater than the 18% drop that economists had expected.

After adjusting for the numbers of working days, the customs office said China exported 6.9% more in April than in March. But most economists said the figures were disappointing.

China had a trade surplus of $13.14 billion in April, calculated from export and import totals issued by the customs bureau. That was less than March's reading of $18.56 billion.

Meanwhile, fixed-asset investment in urban areas soared more than 30% in the first four months in response to a $585 billion government stimulus package.

Recent figures from some of China's trading partners have indicated that the worst of a brutal contraction in export and import flows triggered by the global financial crisis may be over.

Optimism from top central bankers

Jean-Claude Trichet, president of the European Central Bank, further fuelled optimism on Monday by suggesting some economies have already turned the corner.

Federal Reserve chairman Ben Bernanke also said last night that the risk of deflation was 'receding', and expressed confidence that the US dollar would remain strong.

The Fed chair admitted that the economic situation was very difficult and tough decisions would come in trying to retain price stability, particularly deciding when to tighten monetary policy.

With the US government pumping billions of dollars into the economy there are fears in some quarters that inflation, rather than deflation, would be a threat to the economy.