China: Merchandise exports increase at a still-rapid pace in May
Merchandise exports shot up 27.9% on an annual basis in May, following April’s 32.3% upturn. May’s reading was boosted by major developed economies emerging from lockdown. Moreover, the data suggested that the focus of exports shifted away from Covid-19-related goods, such as protective clothing, towards non-pandemic products. That said, May’s growth figure was below market expectations, potentially due to some localized Covid-19 cases disrupting port activity. Meanwhile, merchandise imports climbed 51.1% over the same month last year in May (April: +43.1% yoy), marking the best result since January 2011, in large part on the back of surging commodity prices.
As a result, the merchandise trade balance improved from the previous month, recording a USD 45.5 billion surplus in May (April 2021: USD 42.9 billion surplus; May 2020: USD 61.9 billion surplus). Lastly, the trend deteriorated, with the 12-month trailing merchandise trade balance recording a USD 610.8 billion surplus in May, compared to the USD 627.2 billion surplus in April.
Year-on-year growth rates for exports and imports will likely ebb going forward as the base effect turns less favorable, although underlying momentum should stay fairly robust amid stronger demand abroad, recovering domestic consumption and high commodity prices.