China: Merchandise exports rise at a faster pace in May; imports return to growth
Merchandise exports shot up 16.9% year-on-year in May, beating market expectations and on the heels of April’s 3.9% increase. Meanwhile, merchandise imports rose 4.1% in annual terms in May (April: 0.0% yoy). The stronger trade figures were linked to the easing impact of pandemic restrictions on factory activity and supply chains, particularly in Shanghai, the country’s largest port.
As a result, the merchandise trade balance improved from the previous month, recording a USD 78.8 billion surplus in May (April 2022: USD 51.1 billion surplus; May 2021: USD 43.2 billion surplus). Lastly, the trend improved, with the 12-month trailing merchandise trade balance recording a USD 775.7 billion surplus in May, compared to the USD 740.2 billion surplus in April.
In the near term, exports should get a boost from the further unwinding of Covid-19 restrictions, while the value of imports should be buoyed by higher prices.
Giving their view on the trade outlook, analysts at the EIU said:
“The May data, along with strong regional export figures, continue to suggest a degree of global demand resilience that we expect to persist over July-September. From the fourth quarter, however, we expect higher inflationary pressure, elevated interest rates and slowing economic growth in China’s main trading partners to weigh on export performance.”