China May imports down 18.1% to 803.33b yuan: Govt data

BEIJING (BLOOMBERG) -  China’s exports declined in May for a third straight month and imports slumped for the seventh, underscoring weak external demand and a sluggish domestic environment.

Overseas shipments fell 2.8 per cent from a year earlier in yuan value, the customs administration said in Beijing on Monday.

That compared with the median estimate for a 4 per cent decline in a Bloomberg survey of analysts.

Imports slid 18.1 per cent, leaving a trade surplus of 366.8 billion yuan (S$80.2 billion). The trade slowdown coincides with a slump in investment growth that is putting Premier Li Keqiang’s 2015 growth target of about 7 per cent at risk. In response, officials have eased monetary policy and engineered a debt swap for local governments so they can keep funding infrastructure projects. “Policy support has continued to escalate during the past month,” Wang Tao, chief 

China economist at UBS Group AG in Hong Kong, wrote in a note before the data release. “We expect the authorities to maintain an easing stance, with infrastructure and monetary easing at the forefront of policy efforts.”

The Shanghai Composite Index dropped below 5,000 briefly after the data were first reported by China Central Television and then gained 0.6 per cent as of 10:37 a.m. local time.

China’s exports last month fell 2.5 per cent from a year earlier in dollar terms, while imports plunged 17.6 per cent, leaving a trade surplus of US$59.49 billion, customs data showed. “The plunge in imports in May was mainly caused by much lower import prices – import prices from crude to iron ore were much lower in May than a year ago,” said Liu Xuezhi, a Shanghai-based macro-economy analyst at Bank of Communications Co.

“It also reflected China’s weak domestic demand,” Liu said, adding that exports may see a slight improvement in coming months.

Premier Li’s government is balancing structural reforms, including new fiscal arrangements and moves to open the nation’s capital account, with the need to keep economic growth ticking along rapidly enough to sustain employment.