China’s export performance in May significantly outpaced expectations, while imports failed to meet forecasts, according to the latest customs data released on Friday. Exports rose by 7.6% year-on-year in U.S. dollar terms, surpassing the anticipated 6% growth projected in a Reuters poll. Conversely, imports increased by just 1.8%, falling short of the predicted 4.2% growth.
In April, China’s exports had grown by a modest 1.5% year-on-year, with imports showing a more robust increase of 8.4%. Over the first five months of the year, exports in U.S. dollar terms rose by 2.7% compared to the same period last year, while imports saw a slight uptick of 2.9%.
A detailed analysis reveals mixed trade dynamics across different regions. Trade with the United States and the European Union declined, whereas China’s engagement with the Association of Southeast Asian Nations (ASEAN) strengthened. Exports to ASEAN countries increased by 4.1% year-on-year from January to May. However, exports to Russia declined during this period, despite a 7.5% rise in imports from Russia.
Certain export categories showed notable trends. The export of ships almost doubled year-on-year in the January to May timeframe, while exports of cars and integrated circuits each grew by 20%. In contrast, exports of rare earths, fertilizers, and cellphones declined. These sectoral variations highlight shifts in global demand and China’s strategic trade focus.
Domestic demand, as indicated by the import of crude oil, remained stable. China’s crude oil imports saw minimal change in the first five months compared to the same period in 2023. Given that China is the world’s largest importer of crude oil, this stability suggests a steady domestic consumption pattern amid broader economic fluctuations.
China’s resilient export growth plays a crucial role in sustaining its overall economic momentum, especially amid ongoing trade tensions with the United States. The Caixin manufacturing purchasing managers’ index reported that new export orders grew for the fifth consecutive month in May, although the growth rate slowed.
The broader global trade environment remains challenging, with a significant rise in trade restrictions. The International Monetary Fund recently reported an increase in global trade restrictions, from about 1,000 in 2019 to 3,000 last year, reflecting a more protectionist global stance since the pandemic.
China’s export growth in May, exceeding expectations, underscores the country’s robust trade capacity despite external challenges. However, the disparity between export and import growth, coupled with regional trade variations and increasing global trade restrictions, presents a complex landscape for China’s economic outlook.
