China's trade data for May has come in mixed

Photo by China Photos/Getty Images

Chinese trade data for May has come in mixed, with an improved performance from imports offset by a weaker-than-expected result for exports.

According to China’s Customs Bureau, the value of imports in US dollar terms fell by 0.4% compared to the levels of a year earlier, easily accounting forecasts for a steeper drop of 6.0%.

Not only was it a sharp improvement on the 10.9% decline seen in the year to April, it marked the slowest annual contraction since October 2014.

Although seemingly a bullish development, there were once again anomalies in the data, particularly when it came to cross-boarder flows between China and Hong Kong.

According to Bloomberg, the dollar value of imports from Hong Kong surged by a record 243% compared to a year earlier, surpassing the previous record of 204% set just one month earlier.

“(This) suggests China‚Äôs issues with fake trade invoices as a back-door channel to circumvent capital controls is getting worse,” noted Bloomberg.

On the other side of the ledger the monthly export performance underwhelmed, falling 4.1% from 12 months earlier.

The result was below expectations for a decline of 3.6%, and an acceleration on the 1.8% decline registered in April.

Much of the weakness was concentrated in the value of exports to the United States which skidded by 12%. In comparison, those to the European Union fell by a smaller 2.1%.

Combined, it saw the nation’s trade surplus come in at US$49.98 billion, up from US$45.56 billion in April but below the US$58 billion figure expected.

Despite the mixed nature of the report, markets have taken the view, on this occasion at least, that the beat on imports is a sign of an improvement in Chinese demand, pushing aside the weak exports figure that points to tepid external demand for Chinese goods and services.

You can read more here.

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.