Exports surprise helps relieve slowing pains
Monday, June 09, 2014
China's exports rose more than analysts estimated in May, helping to cushion a slowdown in the world's second-biggest economy as an unexpected slump in imports highlights the risks to growth.
Overseas shipments gained 7 percent from a year earlier, the customs administration revealed yesterday. That compared to a median estimate of 6.7 percent in a Bloomberg News survey of analysts. Imports fell 1.6 percent - a drop not seen by any of the 42 analysts in the survey that had a median projection for a 6 percent gain. The trade surplus widened to US$35.92 billion (HK$280.18 billion). Stronger exports may bolster mainland leaders' confidence that a recovery in demand from the United States and Europe will support economic growth and reduce pressure on them to counter domestic weakness with stronger stimulus as the property market slumps.
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The import data suggest a fairly subdued state of the domestic economy, and the dilemma for the government is how to balance the need to reduce growth in leverage with all the calls for support. The government has announced a series of targeted policies to support the economy. Measures include help for exporters, tax cuts, speeding up investment in public housing and infrastructure, faster fiscal spending and a reduction in reserve requirements for some banks to spur lending to specific sectors. Premier Li Keqiang said last week that local and central governments must fully implement these policies and reforms set out by the leadership to achieve this year's targets as downward pressure on the economy remains relatively high. The State Council will send eight inspection teams nationwide to check on implementation, Xinhua News Agency also reported at the weekend, and officials who have not "fulfilled their duties" will be punished. BLOOMBERG
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