China’s Exports Rise 48.5% in May

China's exports jumped in May, reassuring investors about the economy's strength but putting pressure on U.S. President Barack Obama to placate critics who say Beijing is keeping the yuan unfairly undervalued.

Imports also grew robustly, testifying to the underlying momentum of the world's third-largest economy despite government steps to cool the red-hot property market.

China's total exports rose 48.5 percent in May from a year earlier and imports were up 48.3 percent, the General Administration of Customs said on Thursday, giving China a trade surplus of $19.5 billion, up from just $1.7 billion in April

For the time being, at least, Chinese exports to Europe registered no impact whatsoever from the continent's debt crisis. On the contrary, exports to the European Union soared to a 49.7 percent year-on-year increase from a 28.5 percent path in April.

Some economists suspected that overseas buyers of Chinese goods might have brought forward their purchases to beat an expected resumption of the yuan's rise, something that had been feverishly anticipated in April and early May.

Exports rose 9.9 percent from April. After calendar adjustments for the number of working days, the increase was 10.9 percent, Customs said. By contrast, imports fell month on month.

Because Europe's debt crisis has sent the euro tumbling, speculation has recently cooled that the yuan will resume its rise after having been frozen since July 2008 to help exporters weather the global credit crunch.

The yuan is tied to the dollar and that has led to a sharp rise in its all-important trade-weighted index. But it has done nothing to appease lawmakers in Washington who blame what they see as a cheap yuan for the loss of millions of U.S. manufacturing jobs.

China’s Exports Rise 48.5% in May, Reuters
6/10/2010 10:00:43 AM