China’s exports fell more than expected in May as global demand remained stubbornly weak, but imports beat forecasts, adding to hopes that the economy may be stabilising.
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Imports dropped 0.4 percent in May from a year ago, much slower than the 6.7 percent fall expected by economists.
“Recovering commodity prices and relatively resilient domestic demand are driving a recovery in import growth”, Julian Evans-Pritchard, an analyst with research firm Capital Economics, said in a note”.
China’s global trade surplus widened to $50 billion from April’s $45.6 billion.
A surge in China’s steel exports over the last two years has seen the global market flooded with cheap steel and led to accusations of dumping against Beijing.
Analysts say the decrease is a result of some refineries undergoing routine maintenance, as well as port congestion, which stifled some incoming shipments.
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China also boosted its iron ore imports by 3.4 percent in May to 86.75 million tonnes from the previous month, the highest since December.
Despite the weak exports, the Chinese central bank said on Wednesday it still expects the economy to grow by 6.8 percent this year.
A total of 155.91 million tonnes of crude oil was imported in the first five months of the year, up 16.5 percent year on year.
Manufacturers have reported signs of steadying last month, but demand remained generally soft as new orders endured at a slower pace than expected. The massive improvement was driven largely by a stabilization of demand in the domestic markets, as well as a leveling off in commodities prices that had been keeping imports depressed. Plastics and steel imports also posted declines.
In 2015, China’s crude imports rose 8.8% to 335.5 million tons, or 6.7 million barrels a day.
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The improvement of inbound trade is a strong reflection of the low base for comparison against past year, as well as an increase in import volume. “With domestic infrastructure and real estate the only show in town, policymakers will be constrained to keep stimulus in place”. “As long as the expectation is that the yuan will continue to depreciate against the USA dollar, this will continue”. Experts claim that China’s road to economic recovery will be a long one and might take more than a year.
