Official trade figures have triggered fresh doubts about the stability of mainland economic growth, with a surprising drop in imports last month signalling weakness in domestic demand.
Data yesterday showed imports fell 1.6 per cent in May from a year ago. Analysts had been predicting a rise of 6 per cent.
It was seen as a troubling development despite a 7 per cent year-on-year surge in exports that came on the heels of a tepid 0.9 per cent increase in April.
Economists had expected a steady rise in imports after indications that government efforts to stabilise stuttering growth had taken effect.
A string of measures were introduced after growth fell to an 18-month low of 7.4 per cent in the first three months of this year.
The effect of those measures was seen in the official Purchasing Managers Index survey for last month.
A drop in inventories in both finished goods and raw materials suggested companies had drawn down stocks to meet rising orders. But Zhang Zhiwei, chief China economist for Nomura, said that while Beijing's measures had probably halted a further weakening of domestic demand, a slowdown in the property market would weigh on economic growth into next year.
Zhang, who last week raised his forecast for growth this year to 7.5 per cent from 7.4 per cent, said: "We do not believe the recovery is sustainable in the medium term and continue to forecast a growth slowdown to 6.8 per cent in 2015."
Exports totalled US$195.47 billion last month, data yesterday from the General Administration of Customs showed.
Imports were US$159.55 billion, pushing the trade surplus out to US$35.92 billion from US$18.5 billon in April.
Total trade volume in the first five months of this year saw a year-on-year increase of 0.2 per cent to US$1.68 trillion.
Liu Li-gang, chief economist for Greater China at ANZ Bank, attributed the weak import numbers to a recent crackdown on using commodities as collateral to finance business deals.
Chinese regulators have been investigating commodity financing at Qingdao , China's third largest foreign trade port, where companies are suspected of using imports of copper, aluminium or iron ore as collateral.
The result is that several companies may be claiming ownership of the same metal shipment.
Liu said: "China's commercial banks will likely further tighten rules in the commodity financing business, which will pose significant pressure on imports going forward."
He said weak import growth would keep the yuan under pressure in the coming months
Meanwhile, customs department spokesman Zheng Yuesheng said export growth had "returned to a normal level and will continue to improve".
Additional reporting by Reuters, Bloomberg