- Exports fell 7.5 percent in May compared to a year ago, much worse than the 0.4 percent decline predicted by a Reuters poll.
- Imports for May fell 4.5% from a year ago – less than the 8% decline forecast by Reuters.
- The decline was so sharp that export volumes were below levels at the start of the year, after accounting for seasonality and changes in export prices, Julian Evans-Pritchard, head of China economics at Capital Economics, said in a note.
A cargo ship is seen loading containers near Yantian Port in Shenzhen, in the wake of the novel coronavirus disease (COVID-19) outbreak, Guangdong Province, China, May 17, 2020.
Martin Pollard | Reuters
BEIJING – China’s exports fell in May for the first time since February, adding to concerns that growth in the world’s second-largest economy is faltering.
On Wednesday, customs data showed that exports fell 7.5% year-on-year to $283.5 billion, much worse than the 0.4% decline predicted by a Reuters poll.
The decline was so sharp that export volumes came in below levels at the start of the year, after accounting for seasonality and changes in export prices, Julian Evans-Pritchard, head of China economics at Capital Economics, said in a note.
“This indicates a decline in global demand for Chinese goods,” he said.
In April, China’s exports slightly exceeded expectations with a growth of 8.5% year-on-year. However, the disappointing export figures for May suggest the long-term trend is downward, said Hao Hong, chief economist at Grow Investment Group.
He said China will not be able to count on trade to boost its economy “for another six months for sure,” pointing to waning fading US demand, as inflation — and interest rates — remain high.
Customs data released on Wednesday showed that the dollar value of China’s exports to the United States fell 15.1% in May from a year earlier, while exports to the European Union fell 4.9%. However, China’s exports to ASEAN rose 8.1% in dollar terms in May over the previous year.
Imports for May fell 4.5% from a year ago to $217.69 billion – less than the 8% drop forecast by Reuters. China’s monthly imports have declined year on year since late last year.
Other analyzes of the data showed signs of recovery in domestic demand.
Evans-Pritchard of Capital Economics estimated that import volumes for May reached an 18-month high, after accounting for a lower comparison base and price changes.
He predicts that imports “will continue to recover over the coming quarters as the boost from reopening continues to grow.”
China is preparing to publish inflation data on Friday.
— CNBC’s Jihye Lee contributed to this report.
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