China's exports, imports stronger than expected
CHINA'S exports and imports rebounded more strongly than expected in May, giving bigger breathing space for policy-makers to implement supportive measures.
Exports rose 15.3 percent from a year earlier to US$181.1 billion last month, up sharply from 4.9 percent in April and 8.9 percent in March, the General Administration of Customs said yesterday.
Imports grew 12.7 percent to US$162.4 billion, also much quicker than April's 0.3 percent gain and March's 5.3 percent increase. But it was still in stark contrast to the 39.6 percent surge in February.
The customs said May's trade value of US$343.5 billion reached a historical high with both exports and imports producing a new record. Trade surplus stood at US$18.7 billion last month, a bit more than April's US$18.4 billion.
"Better-than-expected trade performance in May suggested that China's economy has stabilized and it will start to rebound soon," said Zhou Hao, an economist at Australia and New Zealand Banking Group Ltd.
Xue Jun, an analyst at CITIC Securities Co, said the sudden acceleration of exports relied on a pick-up in demand from developed countries, while deals with emerging markets continued to fare quite well.
Last month, China's shipments to the United States, Japan and the Association of Southeast Asian Nations jumped 23 percent, 13 percent and 28.1 percent respectively, while exports to the debt-stricken European Union also turned around to 3.4 percent from the negative reading in April.
Imports growth was based on a significant increase of more imports of iron ore, crude oil and soybean, and indicated that recovery in domestic demand is on the way, analysts said.
"If such a trade growth momentum can sustain, it will greatly relieve concerns of policy-makers over a too sharp moderation in China's economy," said Tang Jianwei, an analyst at Bank of Communications. "We expect China will slow the pace in rolling out new stimulus, and strictly control the quality of new measures."
In May, consumer prices rose the least in nearly two years, and industrial production halted a sharp deterioration, indicating the economy may have started to stabilize, although retail sales and fixed-asset investment remained weak.
The central bank unexpectedly cut interest rates last Friday, the first such move since 2008. Before that, China introduced a set of fiscal stimulus including subsidies for energy-efficient products, acceleration of tax reforms, faster approval of new investment projects and expansion of private capital into previously state-dominant sectors.
In the first five months, China's trade expanded 7.7 percent to US$1.51 trillion and had a surplus of US$37.9 billion.
The increase in the trade surplus will likely cap the yuan's depreciating tendency in recent months, said Zhou, who forecast that the Chinese currency may strengthen by 1.5 percent by the end of the year and said the volatility of the yuan's exchange rate would rise further.
Shanghai's trade rose 3.8 percent on an annual basis to US$176.7 billion in the first five months, following Guangdong and Jiangsu provinces in value.
