BEIJING: China’s exports grew more quickly and for a second month in May, suggesting factory owners are managing to find buyers overseas and providing some relief to the economy as it battles to mount a durable recovery.
The jury is still out, however, on whether the export sales are sustainable while a protracted property crisis has led to persistent weakness in domestic demand – a factor highlighted again in last month’s imports figures.
Outbound shipments from the world’s second-largest economy grew 7.6% year-on-year in value in May, customs data showed on Friday.
But imports increased at a slower 1.8% pace, from a 8.4% jump in the previous month, highlighting the fragility of domestic consumption.
The export figure beat a forecast 6.0% increase in a Reuters poll of economists and a 1.5% rise seen in April, but was likely also aided by a lower base of comparison, after rising interest rates and inflation in the U.S. and Europe squeezed external demand in the previous year.
Friday’s shipments data possibly also suggests a global cyclical upturn in the electronics sector is helping China’s sales of components and finished manufactured goods.
Over recent months, a flurry of data has shown different parts of the $18.6 trillion economy recovering at varying speeds, heightening uncertainty about the outlook.
While first quarter growth blew past forecasts and strong March export and output data suggested improving global demand might aid officials’ efforts to get the economy back on a more even keel, more recent indicators reflecting soft domestic consumption have eroded much of that earlier optimism.
However, despite the solid growth in exports, the tempered outlook on slower imports warrants careful consideration. While China exports rise, slower imports suggest potential challenges in domestic demand and consumption.
read more
image source
