China's May Exports Down 7.5% YoY... First Negative in 3 Months

Sudden Export Slump... Variable for 5% Growth Target

China's export value in May fell by 7.5% compared to the same period last year, according to the General Administration of Customs of China.

Containers waiting to be loaded are stacked at Rizhao Port in Shandong Province, where ultra-large carriers can dock. [AP = Yonhap News]

According to the General Administration of Customs on the 7th, China's export value last month was $283.5 billion (approximately 369.11 trillion KRW), down 7.5% from May last year. This marks the first decline in China's monthly exports in three months compared to the previous year.

China's exports grew by 14.8% year-on-year in March, gaining momentum, followed by an 8.5% growth in April, but the growth rate significantly dropped compared to March.

May imports also fell 4.5% year-on-year to $217.69 billion. This figure is below both the previous month's growth rate (8.5%) and the forecast (-0.4%). Earlier, the expected figure compiled by Chinese financial information service provider WIND was -0.1%.

China's monthly export growth rate had been negative for five consecutive months from October last year (-0.3%) to February this year (-6.8%), before rebounding to 14.8% in March. However, it recorded a decline again for two consecutive months starting in April. According to the Hong Kong South China Morning Post (SCMP), this is the second-lowest figure since May 2022.

China's unexpected sluggish performance in exports, which the government expected to be a driving force for economic recovery, raises the possibility of variables affecting the 'around 5.0% growth' target set for this year, the first year of 'With COVID-19' policy.

Meanwhile, major international organizations have expressed optimism about China achieving its target in recently released reports.

The World Bank (WB) forecasted in its World Economic Outlook report released on the 6th (local time) that China's economy will grow by 5.6% this year. The Organisation for Economic Co-operation and Development (OECD) projected China's growth rate at 5.1% in its world economic growth forecast released on the 7th.

Previously, the Chinese government had declared strengthening exports to support economic recovery. However, due to the global economic slowdown, exports have shown a continuous weakness. With weak external demand and slowing factory production, China's export recovery is analyzed to be sluggish.

China's trade surplus in May was $65.81 billion (approximately 85.68 trillion KRW), down 16.1% compared to the same period last year.