China trade data underscores growth worries

Sat Jun 8, 2013 7:02am EDT
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By Xiaoyi Shao and Jonathan Standing

BEIJING (Reuters) - China's exports posted their lowest growth rate in almost a year in May while imports unexpectedly fell, government data showed on Saturday, underlining concerns that growth in the world's second-largest economy could slow anew in the second quarter.

Evidence has mounted in recent weeks that the economy is fast losing growth momentum as sluggish domestic demand fails to make up for lethargic export sales.

The latest figures, shorn of the hot money speculation and exports to warehouses but booked as sales that had inflated previous months' data, more accurately reflect the grim reality facing China's exporters.

"The trade data reflects the sluggish domestic and overseas demand, signaling a slower-than-expected recovery in the second quarter," said Shen Lan, an economist at Standard Chartered in Shanghai.

Data for May retail sales and industrial output, as well as investment and inflation, are due on Sunday and could provide more evidence of the slowdown.

Exports edged up 1 percent in May from a year earlier, the lowest growth since last July and against a median forecast in a Reuters poll of a rise of 7.3 percent. Data was even worse for imports - they fell 0.3 percent against expectations of a 6 percent rise.

The trade surplus was $20.4 billion for the month, compared with market expectations of $19.3 billion.

Exports to the United States, China's top export destination, fell 1.6 percent in May, the third straight month of declines, while those to the European Union, the second most important market, fell 9.7 percent, also the third straight month of declines.   Continued...

A construction worker looks at Pudong financial district as he wait to cross an avenue in Shanghai May 30, 2013. REUTERS/Carlos Barria