Beijing/Guangzhou (China Daily/ANN) - Exports jumped by more than 15 per cent in May, from the previous year, as shipments to the United States rose significantly and trade with the European Union rebounded.
But economists warned that, despite these figures, it is still too early to throw caution overboard and prospects for the year remain dim.
However, exports did beat market expectations to surge by 15.3 per cent to $181.1 billion in May, against 4.9 per cent growth in April, according to figures released on Sunday by the General Administration of Customs.
And imports rose 12.7 per cent year-on-year, to $162.4 billion last month, much stronger than the 0.3 per cent rise in April.
Both exports and imports hit record highs in terms of value. The trade surplus in May hit $18.7 billion after reaching $18.4 billion in April.
"May figures are not representative and we have to wait for some months to see whether exports have truly recovered," said Jia Kang, head of the research institute for fiscal science at the Ministry of Finance. "But they did bring some relief and showed the situation is not as bad as expected," he said.
China faces the risk of further slowdown in the economy amid European woes.
The People's Bank of China, the central bank, lowered interest rates by 25 basis points last week, taking one-year borrowing costs down to 6.31 per cent and the one-year savings rate to 3.25 per cent.
Exports surged by 8.7 per cent, year-on-year, to $774.4 billion from January to May, and imports increased by 6.7 per cent to $736.5 billion during the same period, according to the figures.
Trade with the US jumped 12 per cent to $190 billion during the first five months, and trade with the EU picked up by 1.3 per cent. China's shipments to the US jumped by 23 per cent in May, from a year earlier, the biggest increase this year.
"It's still early to conclude that the worst is over," said Zhao Jinping, economist from the Development Research Centre of the State Council.
Zhang Yansheng, secretary-general of the academic committee of the National Development and Reform Commission, agreed. Boosting exports depends on a number of factors, such as Europe, costs for manufacturers and protectionist tendencies, Zhang said.
The eurozone remains a cause for concern even after its finance ministers agreed on Saturday to lend Spain up to 100 billion euros ($125 billion) to shore up its teetering banks.
The EU is China's largest trade partner.
"Trade in the second half of the year will be much more complicated," Jia said.
Both experts and officials have recently downplayed export prospects.
Pressure has been increasing on the government to roll out more stimulus measures, experts said.
According to the National Bureau of Statistics, inflation in May slowed to 3 per cent. Growth in industrial production was below 10 per cent for the second consecutive month, the first time that has happened in three years.
Retail sales showed the smallest rise in almost six years, excluding the January and February holiday months. Fixed-asset investment, excluding rural households and not adjusted for inflation, rose 20.1 per cent in the first five months, the weakest increase for a January-May period since 2001.
"Time is pressing for the exporters to change their growth model," Zhang said.
"Demand in Europe has shrunk due to the global economic slowdown. But we have taken measures to maintain sustainable export growth," said Li Fucan, a marketing manager at Lapin Lighting Technology.
The Shenzhen-based lighting company exports almost 80 per cent of its products to the European market, with sales reaching some $40 million last year.
"Our products are strictly in accordance with European standards. This has greatly helped us satisfy the demand in Europe," said Li, who also added the company will try to explore the domestic market opportunities to hedge against European demand falling further.
Lin Wei, general manager of Big Tree Toys Co based in Shantou, Guangdong province, said the outlook for the industry is not good.