China’s economy is still battling to regain growth momentum.
Surveys of manufacturing and service sector activity for May, released last week were weaker than expected, now exports for last month have slid and imports slumped.
Part of the fall in imports was due to lower prices for products such as coal, LNG, oil, and chemicals, but that doesn’t fully explain the biggest fall for years. Coal imports also fell sharply in volume terms, down around 20%.
China though took advantage of the low oil prices in April and May and booked a record amount of imports – up 19.2% from 2019 to the highest level ever of 47.97 million tonnes or 11.3 million barrels a day. That compares with a 2019 daily average of 10.1 million barrels.
Data from China’s Customs trade surplus surged to a record in May as exports fell less than expected and imports slumped along with commodity prices.
Exports fell 3.3% in dollar terms from a year earlier, while imports plunged 16.7%, leaving a trade surplus of $US62.93 billion.
May’s fall (from May 2019) compared with a year earlier, worsening from a 14.2% decline the previous month and marking the sharpest fall since January 2016.
“The slump in imports is mainly due to a high base from last year and the fall in commodities prices,” said Xing Zhaopeng, an economist at Australia and New Zealand Banking Group Ltd. in Shanghai. “The volume of most major import items rose, showing China’s economy is gradually recovering,” Bloomberg reported.
The average purchase price of crude oil slumped 21.2% in yuan terms in the first five months of the year, although the volume of purchases rose 5.2%, it said.
The value of auto imports shrunk by 31.3% as exports from countries such as the US, Japan, and South Korea fell.
China’s trade surplus with the United States widened to $US27.89 billion in May.
