China trade: imports grow at fastest pace in a decade as trade surge continues

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China’s imports and exports grew again in May, but both missed expectations, data released on Monday showed.

Imports grew by 51.1 per cent in May from a year earlier to US$218.4 billion, up from the 43.1 per cent growth in April, according to data from the National Bureau of Statistics. This was below the median result of a survey of analysts conducted by Bloomberg, which predicted 54.5 per cent growth.

This was the eighth consecutive period of import growth and the fastest import growth since January 2011, although the fact that imports fell by 16.7 per cent in May last year due to the impact of the coronavirus is a factor in the size of the increase this year.

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China’s exports grew by 27.9 per cent last month from a year earlier to US$263.9 billion, down from the 32.3 per cent growth seen in April. This was also below the result of the Bloomberg survey, which predicted 32 per cent growth.

Export surprised a bit on the downside, maybe due to the [coronavirus] cases in Guangdong province which slowed down the turnover in Shenzhen and Guangzhou ports

Zhiwei Zhang

This was the 11th consecutive period of export growth, but again, the export drop of 3.3 per cent in May last year means the latest figures also started from a low base.

China’s total trade surplus stood at US$45.53 billion in May, compared with US$42.85 billion in April.

“Export surprised a bit on the downside, maybe due to the [coronavirus] cases in Guangdong province which slowed down the turnover in Shenzhen and Guangzhou ports,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management, adding that turnover at ports in Guangdong will likely remain slow in June.

Major shipping companies have warned clients of worsening congestion at Shenzhen’s Yantian port in Guangdong province after the recent outbreak.

Zhang expects this shock to be transitory and the current outbreak in Guangdong to be brought under control in a few weeks.

In May, China’s trade surplus with the US rose to US$31.78 billion from US$28.11 billion in April.

China’s imports from the US rose by 40.53 per cent to US$13.11 billion in May, while exports rose by 20.6 per cent to US$44.89 billion.

On Saturday, US Trade Representative Katherine Tai said that the trade relationship between the two largest economies in the world has a “significant imbalance” and the Biden administration is committed to levelling it.

In the first five months of the year, China’s exports grew 40.2 per cent year on year to US$1.24 trillion, while imports rose 35.6 year on year to US$1.03 trillion. China’s trade surplus during the same period was US$203.45 billion, a year on year increase of 70.2 per cent.

In terms of other trading partners, China’s exports to Australia rose to US$4.91 billion in May, a year on year increase of 1.43 per cent, while imports rose 55.43 per cent compared to last year to US$13.60 billion. This led to China’s trade deficit with Australia to increase by 122.3 per cent to US$8.69 billion.

China’s exports to European Union rose by 12.57 per cent to US$39.92 billion in May compared with a year earlier, while imports rose by 57.72 per cent to US$27.25 billion. China’s trade surplus with the European Union in May was US$12.67 billion, down 30.33% from a year earlier.

The Association of Southeast Asian Nations (Asean) remained China’s largest trading partner, followed by the European Union, and the United States.

China’s exports to the Asean rose by 40.59 per cent to US$39.19 billion in May compared with a year earlier, while imports from the Asean rose by 53.77 per cent to US$33.13 billion.

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