China Exports Falter In May At The Face Of Sluggish Global Demand

Concerns that the growth of the second-largest economy in the world may be slowing intensified when China’s exports dipped in May for the first time since February.

Falling Exports

According to customs statistics released on Wednesday, exports decreased 7.5% yearly to $283.5 billion, far worse than the 0.4% loss estimated earlier. It was noted by Julian Evans-Pritchard, head of China Economics at Capital Economics, that after taking into account seasonality and fluctuations in export pricing, the decrease was so severe that export volumes were below their levels at the beginning of the year.

With an increase of 8.5% year over year in April, China’s exports modestly outperformed forecasts. But the dismal May export data show that the longer-term trend is downward.

According to customs statistics issued on Wednesday, China’s exports to the United States fell 15.1% in dollar value from a year earlier in May, while exports to the European Union fell 4.9%.

A Tense Situation

Following the release of the data, Asian markets, as well as the yuan and the Australian dollar, a commodity currency that is highly susceptible to changes in Chinese demand, all saw losses.

As small-time investors became pessimistic about stocks and raised their bets on safer assets amid a faltering economic recovery, China’s post-pandemic market surge has faded.

As per Reuters, with imports of coal down from the 15-month high reached in March and lackluster demand from the steel and power industries, demand for raw materials generally decreased. From a year earlier, copper imports fell 4.6% in May.

Factory activity decreased more quickly than anticipated in May, according to China’s official purchasing managers’ Index (PMI), which was issued last week.

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