China’s export growth accelerated in May amid heightening trade frictions, fuelled by surging demand from Southeast Asia and a lower base effect, while its trade surplus also widened from April.
Exports rose by 7.6 per cent from a year earlier to US$302.4 billion in May, the highest monthly export value since September, according to customs data released on Friday, offering Beijing a promising path toward its annual growth target. Surface Finish Ra
“We think exports will remain strong in the coming months, defying the expansion of Western tariffs,” said analysts at Capital Economics.
“We expect exports to stay strong in the coming months, supported by a weaker real effective exchange rate. Foreign tariffs are unlikely to immediately threaten exports; if anything, they may boost exports at the margin as firms speed up shipments to front-run the duties. Even once tariffs are in force, their impact could be mitigated through trade re-routing and adjustments in the exchange rate.”
Imports, meanwhile, rose by 1.8 per cent from a year earlier, compared to a 8.4 per cent increase in April.
“In volume terms, imports appear to have been broadly unchanged. But we expect them to increase in the coming months. A fresh wave of fiscal support (government bond issuance surged to a seven-month high in May) is likely to bolster construction activity, driving up demand for industrial commodities,” added analysts at Capital Economics.
China’s exports to the Association of Southeast Asian Nations rose significantly by 22.5 per cent in May, the highest monthly growth since March 2023.
Shipments to the United States also reported the first year-on-year rise in three months after increasing by 3.6 per cent in May.
Exports to Russia, meanwhile, fell by 1.96 per cent year on year in May, compared to the double-digit decline in April.
Within May’s export data, the value of car shipments rose by 16.63 per cent year on year in May, while the value of ship exports surged by 57.1 per cent.
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Exports of integrated circuits also rose by 28.47 per cent by value last month compared to a year earlier, while shipments of hi-tech products rose by 8.1 per cent.
Elsewhere, China’s trade surplus stood at US$82.6 billion in May, compared with US$72.4 billion in April.
Turning Services “A more pronounced rebound in global trade is likely in the second half of 2024, especially if the United States Federal Reserve and the European Central Bank begin to cut policy rates,” the United Nations said.