China’s exports climbed more than expected in May, boosting hopes that the world’s second-biggest economy can maintain its momentum by relying on foreign markets even in the face of new tariff threats.
Exports rose 7.6% in dollar terms from a year earlier, while
imports increased 1.8%, the customs administration said Friday. That left a
trade surplus of almost $83 billion for the month. Economists had forecast that
exports would expand by 5.7% and imports by 4.3%.
Beijing is relying on sales abroad to offset weak consumer
spending at home, where a real estate slump has led households to tighten their
belts. Friday’s numbers indicate that the strategy is paying off so far this
year, helped by strong global demand that’s provided a tailwind for other Asian
trading nations too. South Korean exports hit the highest in almost two years
in May, led by semiconductor sales.
“China’s competitive goods are commanding a bigger share in
the global market,” said Bruce Pang, chief economist for Greater China at Jones
Lang LaSalle Inc. The momentum is likely to continue, he said, helped by a
strong dollar as well as price cuts by exporters.
Still, Chinese firms face growing obstacles that could make
it harder to rely on the export engine for economic growth. In high-tech
industries like electric vehicles, for example, advanced economies including
the US and European Union are erecting trade barriers.
That hasn’t hit China’s auto exports yet. The value of sales
abroad in May was the second-highest on record, down only slightly from April’s
$10.7 billion, Friday’s data showed. But the large European market is about to
get harder to access, with new tariffs on Chinese EVs expected next month.
For now, Chinese exporters are “continuing to front-load
shipments or re-route exports via a third country” to avoid tariffs, said Pang.
Exports to the US rose 4.8% from a year earlier, the most in
three months, while shipments to countries in the Asean bloc of Asian nations
jumped 25% and those to the EU fell 0.7%.
What Bloomberg Economics Says...
Firmer overseas demand is likely to continue to drive
shipments in the coming months, with favorable base effects flattering the
readings. Even so, the lift probably won’t be strong enough to offset weakness
in domestic demand, which was underlined by disappointing imports. Reuters