Slowdown: China's Trade Surplus Grows Less Than Expected

The General Administration of Custom of China released the latest set of trade figures. The trade surplus increased from US$11.4 billion in April to US$13.1 billion in May, much less than the market consensus of US$19.3 billion.

Exports amounted to US$157 billion in May, growing 1% on a month-on-month basis or 19.4% yoy, slower than consensus, while imports amounted to US$144 billion, almost flat on a month-on-month basis or 28.4% yoy, stronger than consensus.

Just like what I observed last month, trade with Japan continues to fall as the earthquake-induced supply-chain disruption reflects in the data. Imports from the United States fell 5% m-o-m, while exports to the United States rose 1% m-o-m.

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Source: General Administration of Customs

So after a few months where exports growth was faster than imports, we see import growing faster again on an year-on-year basis.  The slower-than-expected exports figure shows a somewhat gloomy picture for the exports sector as the global economy slows and export sector in China is facing unprecedented credit tightening, labour shortages and power shortages.

As the economy is probably going to enter a more sustained downtown, particularly in the US, the export picture for China will probably remains somewhat gloomy.  Exports growth will most likely continue to slow as the outlook for the global economy becomes more clouded.

This article originally appeared here: China: Trade Surplus Of May Grew Less Than Expected
Also sprach Analyst – World & China Economy, Global Finance, Real Estate

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