In May, China recorded an increase in exports, which exceeded preliminary expectations.
The mentioned information is contained in official statistics that were published by the customs of the specified Asian country on Friday, June 7. In May, Chinese exports showed a growth of 7.6% compared to the result for the same period last year. It is worth noting that analysts interviewed by the media predicted that this figure would increase by 6%.
The growth in exports indicates that factory owners in China can find new customers abroad. It is worth noting that the positive dynamic of this activity to a certain extent reduces the burden on the economic system of the Asian country, which is currently fighting a kind of struggle for a stable recovery. However, there is still no definitive understanding as to how sustainable exports are in the current volumes.
At the same time, Chinese imports over the past month did not meet preliminary expectations. In May, the corresponding indicator increased by 1.8% compared to the result for the same period in 2023. It is worth noting that experts interviewed by the media expected Chinese imports to grow by 4.2% in the specified month.
In part, the mentioned kind of internal indicator is related to the protracted crisis in the Asian country’s real estate sector. Against the background of these realities, there is weak domestic demand.
Special attention should also be paid to the fact that the growth of the Asian country’s export activity index showed a significant acceleration last month. In April, the supply of goods and services from China to other states showed an increase of 1.5% year-on-year. The above-mentioned May result indicates a clear intensification of the dynamic of this indicator.
At the same time, Chinese imports slowed last month. In April, the corresponding indicator increased by 8.4% compared to the result for the same period in 2023. In May, the dynamic of imports slowed down significantly.
In the first five months of the current year, Chinese exports showed growth of 2.7% compared to the result for the same period in 2023. Imports in January-May 2024 increased by 2.9% year-on-year.
The media, based on their own calculations rested on official data, report that in the first five months of the current year, the supply of goods and services from China to the United States and the European Union decreased. A similar tendency also applies to imports from the mentioned regions to an Asian country.
At the same time, Beijing’s trade with the Association of Southeast Asian Nations is showing an intensification. Chinese exports to the relevant region in January-May 2024 showed an increase of 4.1% year-on-year.
In the first five months of the current year, ship supplies from the mentioned Asian country have almost doubled compared to the result for the same period in 2023. Chinese exports of cars and integrated circuits increased each by 20% year-on-year in January-May 2024.
At the same time, the negative dynamic of the decline in the first five months of the current year of the supply of rare earth elements, cell phones, and fertilizers from an Asian country.
The indicator of crude oil imports to China in January-May 2024 remained virtually unchanged compared to the result for the same period in 2023. It’s worth noting that the Asian country is the world’s largest importer of crude oil.
It is worth noting that Chinese exports are on a growth trajectory at a time of significant deterioration in the state of affairs in the space of trade relations between Beijing and Washington. Also, the positive dynamic of the supply of goods and services from an Asian country is a factor of beneficial impact on global economic rise.
The Caixin manufacturing purchasing managers’ index indicates that in May, new export orders in China grew for the fifth month in a row, although these indicators showed a slower pace.
It is worth noting that the number of global restrictions is currently increasing in the global trade space. Last year, about 3,000 relevant measures were introduced. It is worth noting that in 2019, before the outbreak of the coronavirus pandemic, the corresponding figure was 1,000. This information was published by the International Monetary Fund (IMF) last week.
Frederic Neumann, chief Asia economist at HSBC, says that China is currently so competitive that even trade restrictions will not be an obstacle to the rapid growth of its exports. At the same time, the expert noted that with a potential weakening of demand in the United States, the global trade cycle is quickly going to fizzle. Frederic Neumann also stated that for China’s sustainable long-term growth strategy, its domestic engine must fire up.
Currently, various parts of the $18.6 trillion economy of the mentioned Asian country are recovering at different rates of the corresponding process, which is why uncertainty is forming regarding the overall prospects. This thesis is confirmed by the official data of the Chinese authorities, published since the beginning of the current year.
In the first quarter of 2024, the gross domestic product of the Asian country grew by 5.3% year-on-year. After these data were published, positive expectations regarding Beijing’s economic prospects increased. At the same time, more recent indicators have testified to the continuation of the problem of weak domestic demand. These data have significantly dampened optimism. However, assessments of the prospects of the Chinese economic system are improving. For example, the IMF has revised its corresponding forecast in a more favorable direction. Experts of this organization expect that the Chinese economy will rise by 5% in the current year. It is worth noting that the previous version of the forecast provided for the growth of the mentioned indicator at the level of 4.6%.
The opinion is currently circulating in the expert community that in the short term Beijing will take additional measures to stimulate economic growth. In this case, it implies the promise of the Chinese government to boost fiscal stimulus that will be able to shore up domestic demand.
The Asian country’s share prices fell on Friday. The positive indicators of Chinese exports turned out to be not so significant information against the background of news that lawmakers in Washington intend to ban the Asian country companies that manufacture batteries and interact with Ford and Volkswagen from supplying relevant products to the United States.
Recently, Beijing has been facing accusations of excessive industrial capacity in the advanced and so-called green technology sector. The corresponding accusations were made by Washington and European capitals, which have claims against China about flooding markets. Beijing does not agree with these statements. China has accused the United States and the EU of trade protectionism.
In May, the Asian country’s trade surplus reached $82.62 billion. It is worth noting that experts interviewed by the media predicted that this figure would amount to $73 billion. In April, China’s trade surplus was fixed at $72.35 billion.
Zichun Huang, China economist at Capital Economics, expects the Asian country’s exports to remain at a high level in the near term. According to the expert, the implementation of this scenario will be facilitated by a weaker real effective exchange rate. Zichun Huang says that foreign tariffs will most likely not threaten exports.
It is worth noting that in May, the administration of the President of the United States unveiled a sharp increase in tariffs on $18 billion of exports. In this case, it also implies a fourfold growth in tariffs for Chinese new energy cars.
