China worry extends as im­ports, ex­ports fall

The China Post - - FRONT PAGE - BY FRAN WANG

Chi­nese im­ports fell for a sev­enth straight month in May while ex­ports also sank, ac­cord­ing to of­fi­cial data Mon­day, as the world’s sec­ond big­gest econ­omy shows pro­tracted weak­ness de­spite gov­ern­ment eas­ing mea­sures.

The dis­ap­point­ing fig­ures also come as lead­ers try to trans­form the econ­omy to one where growth is driven by con­sumer spend­ing rather than by gov­ern­ment in­vest­ment and ex­ports.

Im­ports slumped 17.6 per­cent year-on-year to US$131.26 bil­lion, the Gen­eral Ad­min­is­tra­tion of Cus­toms said in a state­ment.

The decline was much sharper than the me­dian fore­cast of a 10 per­cent fall in a Bloomberg News poll of econ­o­mists and fol­lowed April’s 16.2 per­cent drop.

“The May trade data ... sug­gest both ex­ter­nal and do­mes­tic de­mand re­main weak,” said Ju­lian Evan­sPritchard, an an­a­lyst with re­search firm Cap­i­tal Eco­nomics, in a note.

Ex­ports dropped for the third con­sec­u­tive month, fall­ing 2.5 per­cent to US$190.75 bil­lion, Cus­toms said, although that was bet­ter than the me­dian es­ti­mate of a four per­cent fall in the Bloomberg sur­vey.

The sharp de­crease in im­ports meant the trade sur­plus ex­panded 65.6 per­cent year- on- year to US$59.49 bil­lion.

In yuan terms im­ports fell 18.1 per­cent, ex­ports de­creased 2.8 per­cent and the trade sur­plus ex­panded 65.0 per­cent.

The fig­ures pro­vided fur­ther ev­i­dence that frailty in the Chi­nese econ­omy, a key driver of world growth, has ex­tended into the cur­rent quar­ter de­spite in­ten­si­fied gov­ern­ment stim­u­lus mea­sures.

Gross do­mes­tic prod­uct (GDP) grew 7.4 per­cent in 2014, the low­est rate in nearly a quar­ter of a cen­tury, while the new year has shown few signs of a re­ver­sal in the slow­ing trend.

GDP ex­panded 7.0 per­cent in Jan­uary-March, the worst quar­terly re­sult in six years and weaker than the fi­nal three months of 2014.

Bei­jing has set the tar­get for the econ­omy to grow by “around seven per­cent” this year, lower than its tar­get for 2014, which was about 7.5 per­cent.

Bri­tish bank HSBC’s Pur­chas­ing Man­agers’ In­dex (PMI) con­tracted for the third straight month in May and econ­o­mists ex­pect the shrink­age to ex­tend into mid-year.

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