China’s exports continued to grow albeit at a slower than expected pace in May and imports logged a sharp expansion largely due to higher commodity prices and low base of comparison, official data revealed on Monday. According to the General Administration of Customs, China’s exports advanced 27.9 year-on-year in May, but slower than the economists’ forecast of 32.1 percent.
At the same time, imports surged 51.1 percent annually, slightly slower than the expected increase of 51.5 percent.
Consequently, the trade surplus widened to $45.5 billion in May from $42.8 billion in the previous month. The expected level was $50.5 billion. The main reason for the slower-than-expected growth in shipment was that the global shortage of semiconductors dampened electronic exports. While imports of semiconductors weakened on supply constraints, imports of agricultural commodities increased on higher global prices.
Julian Evans-Pritchard, an economist at Capital Economics, said supply constraints should start to ease later this year.
But the pandemic-induced surge in demand for Chinese exports appears to be losing momentum and should reverse as global consumption patterns normalize on the back of vaccine rollouts and easing social distancing restrictions, the economist added.
As operation of some of the ports was affected by the pandemic, June trade and production data will be affected, Iris Pang, an ING economist, said.
This could push up prices of electronic goods in general and affect China’s export prices and eventually import prices in the US and Europe, the economist noted. Supply chains in Asia will also likely be disrupted.