China’s yuan-denominated exports fell by a smaller-than-expected 2.5 percent year-on-year in May, while imports tumbled 17.9 percent, producing a near-record monthly trade surplus of 366.8 billion yuan ($59.49 billion).
The surplus came close to the peak $60.5 billion surplus recorded in February, when numbers were distorted by the Chinese New Year.
Economists polled by Reuters had expected exports in May to fall 5.0 percent from a year earlier and predicted imports would drop 10.7 percent.
Although export numbers came in better than forecast, the slide in imports sparked worries about domestic demand.
“The deepening of the import contraction, despite stronger commodity prices in May, suggests that domestic demand is particularly weak, which contributed mainly to the strong trade surplus,” said Zhao Yang, economist at Nomura.
With imports weaker than expected, Zhu Haibin, China economist at JPMorgan, says the Chinese government’s 6 percent trade growth target for the year may be in jeopardy.
“Even with export growth, it’s quite challenging to meet the 6 percent target,” Zhu said.
China pulse check
Trade figures are the first in a flurry of data from China this week, with inflation figures due on Tuesday and retail sales, industrial production and fixed asset investment on Thursday.
“A very big week for Chinese data which will provide further guidance on the pace of economic activity,” National Australia Bank (NAB) wrote in a note.
China’s exports and imports tumbled in April. Exports fell 6.4 percent from the year-ago period, coming in worse than the 2.4 percent rise forecast in a Reuters poll and following a 15 percent plunge in March. Imports dived 16.2 percent on year, also missing the 12 percent expected drop and after falling 12.7 percent in March.