China’s imports, exports fall in May, suggesting further weakness in the economy
Slump in goods coming into the country due to falling demand, according to analyst
China’s imports fell 18.1 per cent year-on-year to 803.3 billion yuan (HK$1 trillion) in May from the same month last year, official customs data showed on Monday, suggesting further weakness in the world’s second-largest economy.
Exports decreased 2.8 per cent to 1.17 trillion yuan year-on-year and the country’s trade surplus expanded by 65 per cent to 366.8 billion yuan, China’s customs authority said in a statement posted online.
Imports fell for the seventh straight month, while exports declined for the third month in a row despite the government cutting interest rates three times since November while also lowering the amount of cash banks must hold in reserve.
“The slump in import figures is mainly due to weak demand of the global economy and drops in commodities prices,” said Liu Yaxin, an analyst with China Merchants Securities in Shenzhen.
“A slightly improved export figure does not mean the condition is substantially better. Chinese companies still lack bargaining power in global markets due to the relative strength of the Chinese currency.
“Overall, the data shows the Chinese economy is still in the process of seeking a bottom. We expect trade conditions to continue to be sluggish in the following four to five months, with more government policy rolling out to stablise [the economy],” said Liu.
China’s gross domestic product expanded 7.4 per cent in 2014, the lowest rate in nearly a quarter of a century and there have been few signs of a pick-up this year.
GDP expanded 7 per cent in the January-March period, the worst quarterly result in six years.
Watch: Dismal Chinese trade puts slowdown in spotlight
Agence France-Presse, Reuters