BEIJING: China on Saturday reported a sharp slowdown in exports in May compared to the previous month while imports unexpectedly dropped, as the world’s second largest economy grapples with slowing growth and sluggish overseas demand.
Overseas shipments rose just one percent to $182.8 billion last month, far lower than 14.7 percent recorded in April, customs authorities said in a statement.
It also missed a medium forecast of 5.6 percent expansion in a Dow Jones Newswires’ poll of economists.
Imports dropped 0.3 percent to $162.3 billion, said the statement, down from a rise of 16.8 percent in April and well below the economists’ median forecast of a five percent increase.
Trade surplus stood at $20.4 billion last month, it said, widening marginally from the previous month.
The disappointing performance was due to “a slowdown in the domestic economy, sluggish foreign demand, companies’ high costs, the appreciation in the yuan’s real value and a worsening trade environment”, customs said.
The world’s second-largest economy registered 7.8 percent growth in 2012, its slowest rate in 13 years.
The government in April announced a surprisingly weak expansion rate of 7.7 percent for the first quarter, dashing hopes that growth was poised to accelerate in 2013 after showing strength at the end of last year.
More recent economic indicators also failed to improve the outlook, with manufacturing activities in the country coming in at a contracting eight-month low of 49.2, according to a survey by HSBC this week. A figure below 50 indicates a contraction.
“Growth in exports to all major developed economies slowed… suggesting a recovery in the global economy is yet to be strong,” Tang Jianwei, a Shanghai-based economist with the Bank of Communications, told AFP.
“Domestic demand has continued to be slack, affecting imports of commodities and raw materials.”
He also noted that rising trade disputes between China and major trade partners have had “rather big negative impact” on the country’s imports and exports.
On Tuesday the European Commission imposed anti-dumping duties on imports of Chinese solar panels. Beijing responded immediately with an announcement of an anti-dumping probe into European wine, widening a row that has already involved telecom equipments, chemicals and seamless pipes.
The world’s top exporter is also embroiled in trade disputes concerning other products with countries including the United States and Japan.
But Tang said the monthly change in trade data is unlikely to prompt the government to take any immediate measures.
“The Chinese leadership is much more tolerant of slower economic growth than in the past. They want to focus on reforms,” he said.
Chinese leaders have said expansion will slow in the next stage of the nation’s development from the near-double-digit yearly rises of recent decades, as they try to retool the economy to emphasise consumer demand as the key growth driver, rather than investment and exports.
The government has set its economic growth target for this year at 7.5 percent.