7th June 2023 – (Beijing) China’s exports in May shrank by 7.5% year-on-year, the biggest decline since January, while imports fell 4.5%, according to official figures released on Monday. The figures, which reflect weak demand for Chinese goods, surprised economists who had expected a smaller decline in exports and a greater fall in imports. The weak export performance highlights the struggle of manufacturers to find demand abroad, while the weak import performance suggests sluggish domestic consumption. The figures come a week after data showed that South Korean shipments to China fell by 20.8% in May, marking a full year of monthly declines.
Chinese stocks trimmed gains and the Australian dollar, a commodity currency that is highly sensitive to swings in Chinese demand, fell after the trade data was released. Analysts say that China needs to rely more on domestic demand as global demand slows, and there is more pressure on the government to boost domestic consumption in the rest of the year, as global demand is expected to weaken further in the second half. China’s factory activity shrank faster than expected in May, with the official purchasing managers’ index (PMI) showing factory output swinging to contraction from expansion while new orders, including new exports, fell for a second month.