Table of Contents
China's exports saw a solid increase of 7.6% year-on-year in May, while imports grew at a slower pace of 1.8%, down from an 8.4% jump in April. This suggests that factory owners are finding buyers overseas, providing some relief to the economy. However, the weakness in domestic demand remains a concern, highlighted by the slower import growth. A protracted property crisis continues to weigh on the economy, but the trade data should give authorities some breathing space as they work to foster a broad-based economic recovery. The data also suggests a possible global cyclical upturn in the electronics sector, boosting China's sales of components and finished manufactured goods. However, China's trade surplus grew to US$82.62 billion last month, which could raise concerns about one-sided trade favoring China. Despite this, analysts expect exports to remain strong in the coming months, supported by a weaker real effective exchange rate.
