China’s exports are expected to have expanded at a faster pace in May as factories reopened. While imports also likely rose, a Reuters poll showed.
The recovery adds to evidence the world’s second-largest economy has begun to chart a path out of the supply-side shock that rocked world trade and global markets. However, China’s trade outlook faces risks from factors such as high raw material costs. Uncertainties from the Ukraine war and as recovering production overseas affects demand for Chinese good. Surveys showed China’s factory activity contracted at a slower pace in May as COVID-19 curbs in major manufacturing hubs eased.
Exports in May likely grew 8.0% from a year earlier, accelerating from a 3.9% expansion in April. Major automakers ramped up production in May. “COVID disruptions to logistics, production and customs clearing seem to have started to ease since late April,”-analysts. Adding that South Korea’s strong trade data in May likely pointed to still strong global demand. A low base of comparison from a year earlier also likely contributed to the rebound in export growth- Zhang Yu.
Imports were expected to have risen 2% year-on-year in May, the poll showed, likely driven by imports of raw materials and intermediate goods as domestic production resumed. That compared with flat growth in April. China’s trade surplus is likely to have widened to $58 billion from $51.12 billion in April. Economic activity cooled sharply in April as the country grappled with the worst COVID-19 outbreak since 2020.
To stabilise the situation in a politically sensitive year, China’s cabinet recently announced a package of 33 measures covering fiscal, financial, investment and industrial policies, although analysts say the official GDP target of around 5.5% will be hard to achieve without easing the zero-COVID strategy.
-Economictimes.
