China’s exports surged by nearly a fifth last month, official data showed on Tuesday, as exports of technology components and machinery helped the world’s second-largest economy withstand the pressure of war in the Middle East.
The surge is a bright spot for China’s leadership as it struggles to boost economic growth in the wake of the pandemic and amid trade friction with the United States.
The General Administration of Customs said overseas shipments rose 19.4% year-on-year, mainly driven by artificial intelligence and automobile exports, exceeding the 15.0% forecast in a Bloomberg survey of economists.
This was also faster than April’s 14.1% increase.
Imports surged 27.4% year-on-year in May, higher than the 26.0% forecast in a Bloomberg survey. This will bring some comfort to Beijing as it looks to shift China’s growth momentum away from manufacturing and towards domestic consumption.
With Donald Trump visiting Beijing with trade high on his agenda, exports to the United States surged 35.4% year-on-year. The surge also stemmed from a lower base of comparison last April, when the U.S. president triggered a trade war with Beijing.
Exports to the world’s largest economy hit $39 billion, up from $28.8 billion 12 months ago, GAC data showed.
“Strong export growth demonstrates the competitiveness of Chinese companies in the international market,” said Zhang Zhiwei of Pindian Asset Management.
“This helps offset some of the impact of weaker domestic demand.”
But Zhang warned that the risk “of possible escalation of trade tensions between China and major trading partners such as Europe” remained.
The EU said last month that stronger action was needed to rebalance its trade relationship with China.
Talks between EU commissioners on protecting key industries from Chinese rivals will drive further discussions at this month’s G7 heads of state meeting in France and a summit of EU leaders in Brussels.
China’s trade surplus rose to $105 billion last month from $85 billion in April, a shortfall that worries European economies and other governments.
Experts are increasingly warning of a “China shock 2.0”, with a glut of cheap goods made by the Asian powerhouse threatening manufacturers around the world as trade deficits widen.
Despite the surge in trade, weak demand from wars in the Middle East and rising energy costs have begun to weigh on economic growth.
Official data showed factory activity in China was flat last month after two months of expansion.
As raw material prices rise, the country’s factories face higher costs, especially in the energy and chemicals industries, as transportation restrictions remain an issue.
Sanmiya/DHW/Dan
This article was generated from automated news agency feeds without modifications to the text.
