China’s export growth rebounds in May despite trade tensions, fuelled by Asean demand

China’s export growth accelerated in May amid heightening trade frictions, fuelled by surging demand from Southeast Asia and a lower base effect, while its trade surplus also widened from April.

Exports rose by 7.6 per cent from a year earlier to US$302.4 billion in May, the highest monthly export value since September, according to customs data released on Friday, offering Beijing a promising path toward its annual growth target.

“We think exports will remain strong in the coming months, defying the expansion of Western tariffs,” said analysts at Capital Economics.

“We expect exports to stay strong in the coming months, supported by a weaker real effective exchange rate. Foreign tariffs are unlikely to immediately threaten exports; if anything, they may boost exports at the margin as firms speed up shipments to front-run the duties. Even once tariffs are in force, their impact could be mitigated through trade re-routing and adjustments in the exchange rate.”

Imports, meanwhile, rose by 1.8 per cent from a year earlier, compared to a 8.4 per cent increase in April.