China's economy stumbles in May, growth seen sliding in Q2

Sun Jun 9, 2013 5:17pm EDT
 
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By Langi Chiang and Jonathan Standing

BEIJING (Reuters) - Risks are rising that China's economic growth will slide further in the second quarter after weekend data showed unexpected weakness in May trade and domestic activity struggling to pick up.

Evidence has mounted in recent weeks that China's economic growth is fast losing momentum but Premier Li Keqiang tried to strike a reassuring note, saying the economy was generally stable and that growth was within a "relatively high and reasonable range".

China's economy grew at its slowest pace for 13 years in 2012 and so far this year economic data has surprised on the downside, bringing warnings from some analysts that the country could miss its growth target of 7.5 percent for this year.

"Growth remains unconvincing and the momentum seems to have lost pace in May," Louis Kuijs, an economist at RBS, said in a note. "The short-term growth outlook remains subject to risks and we may well end up revising down our growth forecast for 2013 further."

Exports posted their lowest annual growth rate in almost a year in May at 1 percent, exposing a more realistic picture of trade following a crackdown by authorities on currency speculation disguised as export trades to skirt capital controls, which had created double-digit rises in export growth every month this year even as world growth stuttered.

May exports to both the United States and the European Union - China's top two markets - both fell from a year earlier for the third month running.

Imports fell 0.3 percent against expectations for a 6 percent rise as the volume of many commodity shipments fell from a year earlier.

The volume of major metals imports, including copper and alumina, fell at double-digit rates. Coal imports fell sharply.   Continued...

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