By AP
Published on •Updated
China’s exports have shown a year-on-year increase of 4.8% in May, according to data released today, just ahead of anticipated trade discussions between the US and China. However, the figure fell short of expectations, primarily due to a nearly 10% drop in shipments to the United States.
Meanwhile, imports into China decreased by 3.4% annually, resulting in a substantial trade surplus of $103.2 billion (€90.33 billion).
In May, China exported $28.8 billion worth of goods to the United States, while imports from the US saw a sharper decline of 7.4%, totaling $10.8 billion.
On a brighter note, exports to Southeast Asia and the European Union remained strong, with increases of 14.8% and 12% respectively, year-on-year.
Lynne Song from ING Economics highlighted that “the strong growth in exports to other regions has cushioned the impact of the ongoing trade war on China’s export performance.”
However, this growth marked a slowdown compared to an 8.1% surge in China’s global exports in April, as many companies rushed to meet orders before higher tariffs came into effect.
Looking ahead, exports are expected to see a slight rebound in June, thanks to a temporary 90-day suspension of most tariffs that China and the US imposed on each other amid their trade tensions.
“While this truce in tariffs could provide a temporary boost, we anticipate that elevated tariffs and broader constraints will lead to a slowdown in export growth as the year progresses,” Zichun Huang of Capital Economics noted.
Despite these temporary measures, tensions between Beijing and Washington remain high, with ongoing disputes related to advanced semiconductors, essential rare earth materials, and issues surrounding visas for Chinese students entering American universities.
The next round of negotiations is scheduled for Monday in London, following a recent phone call between former President Trump and Chinese leader Xi Jinping.
Additional statistics released today illustrate how the decline in exports affects China’s position as the world’s second-largest economy, particularly as it relies heavily on imports for components and materials vital for its manufacturing sector.
At the same time, China’s domestic markets are also feeling the strain. The government reported a slight decrease in consumer prices of 0.1% in May, which points to weak demand. Economists attribute this deflation partially to lower food prices.
The situation is even more alarming for producers, as producer prices contracted by 3.3% in May, marking the lowest level in nearly two years after a 2.7% reduction in April.
Photo credit & article inspired by: Euronews
