"A slightly improved export figure does not mean the condition is substantially better. Chinese companies still lack bargaining power in global markets due to the relative strength of the Chinese currency"
- Liu Yaxin, macro strategist at China Merchants Securities
While China's exports dropped less than expected in May, a double-digit fall in imports is likely to keep pressure on the Chinese government to add more stimulus to prevent a sharper economic slowdown of the world's second biggest economy. Chinese exporters have been struggling with sluggish overseas demand, increasing labour and currency costs, exacerbating downward pressure on the Chinese economy. China's overseas shipments declined 2.5% in May from a the previous year in dollar terms, following a decrease of 6.4% in April, data from the General Administration of Customs showed. The US accounted for 18.8% of total exports, the most since August 2010, while the European Union made up 15.1%. At the same time imports plummeted 17.6%, resulting in a near record trade surplus of $59.49 billion for the month.
China's trade rose 3.4% in 2014, missing the Beijing's growth target of 7.5% by more than half. The government has lowered its growth goal for 2015, with combined imports and exports predicted to increase around 6%. Many economists have already pencilled in sub-7% growth for the June quarter, raising the risk that the Chinese government will not be able to meet its full-year growth target of around 7%.
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