China's Exports Rise Unexpectedly; Imports Fall More-Than-Forecast
June 09 2019 - 10:45PM
RTTF2
China's exports grew unexpectedly in May as companies
front-loaded ahead of US tariff hike, while imports declined
more-than-expected signaling weak domestic activity.
Data from the General Administration of Customs on Monday showed
that exports advanced 1.1 percent year-on-year in May confounding
expectations for a decline of 3.9 percent.
On the other hand, imports decreased 8.5 percent annually
compared to the expected drop of 3.5 percent.
As a result, overall trade balance showed a surplus of $41.65
billion in May, much bigger than the forecast of $22.3 billion.
Exports to the U.S. fell 4.2 percent from a year ago, while
imports from the U.S. plunged 26.8 percent.
The US raised the tariffs on $200 billion worth of Chinese goods
to 25 percent from 10 percent, on May 10. China retaliated by
raising tariffs on $60 billion worth of imports from the US.
US President Donald Trump and China's Xi Jinping are set to meet
at the G-20 summit in Japan later this month.
Marcel Thieliant, an economist at Capital Economics, said he
expects all US imports from China to be subject to a 25 percent
tariff by early next year.
China is mulling restrictions on rare earth exports,
blacklisting US firms and discouraging Chinese citizens from
visiting the US or studying there. The upshot is that the outlook
for trade remains bleak, the economist noted.
The International Monetary Fund cut China's growth forecast for
this year and next to 6.2 percent and 6 percent, respectively,
citing downside risks and high uncertainty surrounding trade
tensions, and said more policy easing may be needed if the conflict
escalates.
In yuan terms, overall China's exports rose 7.7 percent in May,
while imports slid 2.5 percent annually, the customs administration
reported. Exports were forecast to grow 4.7 percent and imports to
rise 5.8 percent.
Data from the People's Bank of China showed that China's foreign
exchange reserves increased by $6 billion to $3.101 trillion in May
after falling a month ago. Economists had forecast reserves to fall
to $3.09 trillion.
Gold reserves were valued at $79.83 billion at the end of May
compared to $78.35 billion in the previous month.
Gold reserves of China increased for a sixth month in a row in
May.
The State Administration of Foreign Exchange said sound economic
fundamentals will support smooth functioning of China's foreign
exchange market.
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