China’s exports in May grew more than expected, boosting the country’s economy despite a surprise decline in imports.
Overseas deliveries rose 7 percent from a year ago, reported the customs administration today in Beijing. Analysts surveyed by Bloomberg had expected the exports to grow by 6.7 percent. Imports declined by 1.6 percent against an expected 6 percent increase. Trade surplus rose to $35.92 billion. The gain in exports in April was the first after two straight monthly declines.
The recovering U.S. and European markets are a positive signal for China’s economy, which is grappling with a property market slowdown. Matters were helped further last week on data showing U.S. labor market is strengthening, while the ECB announced easing measures, potentially reducing the need for more economic stimulus in China.
“The export figures are positive news for policy makers and we expect continued solid export growth in the coming months amidst gradually improving global demand momentum,” Louis Kuijs, a Hong Kong-based chief China economist at Royal Bank of Scotland Plc told Bloomberg. “The import data suggest a pretty subdued state of the domestic economy though and the dilemma for the government is how to balance the need to reduce growth in leverage with all the calls for support.”
Beijing rolled out targeted measures to boost economic growth after the economy grew at 7.4 percent from a year ago, which is less than the government’s annual target of 7.5 percent. The measures include as tax cuts, accelerated spending in public infrastructure and housing, speedy fiscal spending, exports assistance and lowering reserve requirements for certain banks in order to stimulate lending in critical sectors. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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