China's exports up 1.4% in May but imports fall 12.7%

China’s exports rose by 1.4 percent year on year in yuan terms to 1.46 trillion yuan (US$205.74 billion) in May, official data showed on Sunday.

Imports fell by 12.7 percent to 1.01 trillion yuan last month, resulting in a trade surplus of 442.75 billion yuan, the General Administration of Customs said.

Part of the plunge in the value of imports could be explained by falling commodity prices worldwide, said Rajiv Biswas of IHS Markit.

Iris Pang, ING chief economist for China, said another reason was likely a drop in parts bought for re-exports — imported goods that are shipped out after further processing — due to the uncertainty of global demand.

Foreign trade of goods decreased by 4.9 percent year on year in May to 2.47 trillion yuan.

In the first five months, foreign trade of goods dropped by 4.9 percent year on year to 11.54 trillion yuan, maintaining the same level of decrease during the January-April period.

Medical exports supported Chinese shipments in April and May, with shipments of textile yarns, fabrics and products rising 21.3 percent for the first five months on year. During the January-May period, ASEAN was China’s largest trading partner with trade up by 4.2 percent year on year to 1.7 trillion yuan, accounting for 14.7 percent of China’s total foreign trade.

Trade with the European Union, the United States and Japan decreased during the period, GAC data showed.

“Exports benefited from the ASEAN market and exchange rate depreciation, while imports were affected by insufficient domestic demand and commodity price declines,” said Wang Jun, chief economist of Zhongyuan Bank.

During the same period, the foreign trade volume of private enterprises expanded by 1.8 percent to 5.11 trillion yuan, accounting for 44.3 percent of China’s total foreign trade volumes, up by 2.9 percentage points from the same period last year.

General trade, which represents a longer production chain and higher added-value as the key indicator of a country’s foreign trade competence, decreased by 4.7 percent year on year in the first five months. However, it accounted for 59.9 percent of the country’s total trade, 0.1 percentage points higher over one year ago.

Noting that the COVID-19 pandemic has brought shockwaves to global trade, experts say it is crucial for China to strengthen the implementation of measures to stabilize foreign trade. Cities in China have been rolling out measures to boost local demand, with Beijing announcing last week it would offer coupons worth 12.2 billion yuan to spur consumption.