The FINANCIAL — China’s exports slipped moderately in May while imports tumbled as the world’s second largest economy was hit by weak demand at home and abroad, according to Nasdaq.
Exports were down 2.5% year-over-year, official data showed on June 8 beating market expectations and improving on the 6.4% fall in April, but the decline was the third monthly drop in a row.
Imports slid 17.6% year-over-year after a 16.2% drop in April, reflecting a domestic economy that has seen anemic growth despite an array of government measures to prop up the manufacturing sector as well as consumption.
“Exports are not coming to the rescue this year,” said Andrew Polk, economist at the Conference Board.
“And the import story is really about domestic investment. No one is investing now, and this really reflects weakness in the domestic economy, ” he said.
China’s economy grew 7% year-over-year in the first quarter, its worst performance in six years. Some economists see signs that the economy may not yet be turning around despite government spending efforts, tax cuts and cuts in interest rates.
“Based on the data we are not confident that China’s economic growth can bottom out in the second quarter of the year,” said HSBC economist Ma Xiaoping.
Exports for January to May crept higher, rising a meager 0.7% from a year earlier, while imports were down 17.3% in the same period.
“Pressure on exports this year remains considerable,” the nation’s customs authorities said in an online statement, citing an industry survey.
The big drop in imports in May meant that China’s trade surplus widened in the month to $59.49 billion from $34.1 billion in April, exceeding market expectations. The trade surplus stood at $217.26 billion for the first five months of the year and continued import weakness could mean big surpluses in the months ahead. ING estimates the trade surplus could be close to $600 billion for the full year, up from $383 billion last year.
Exports to the U.S. showed solid growth of nearly 8% in May alone while shipments to the Association of Southeast Asian Nations were about flat. Exports to the European Union were down 7%, while those to Japan fell 8%.
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