China Exports Falls Sharply in May

The fall in Chinese exports and imports accelerated in May, dashing hopes that a collapse in the country’s external trade flows had bottomed out and pointing to the continued weakness in global demand.

Exports dropped 26.4 per cent from a year earlier, compared with a 22.6 per cent fall in April. This marked the seventh consecutive month of decline. Imports fell 25.2 per cent, following a 23 per cent decline a month earlier. China’s trade surplus rose slightly from Rmb13.1bn in April to Rmb13.4bn in May.

China, the world’s second-biggest exporter, has cut taxes, boosted lending and pledged to keep its currency stable to sustain overseas sales amid the worst global slump since the Great Depression. The economy grew at the slowest pace in almost a decade last quarter as tumbling orders forced manufacturers to shut factories and fire workers.

The government said this month that a quick rebound in trade is becoming less likely and unveiled higher export rebates on some steel products, electronics, machinery and toys, the seventh increase since August.

Still, China’s export orders index advanced to 50.1 in May, marking the first expansion in 11 months, a government-backed manufacturing index showed.

China Exports Falls Sharply in May, Bloomberg, FT
6/11/2009 10:01:01 AM