China's imports quicken, exports slow in May
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China's imports grew faster than expected in May, indicating the country's appetite for commodities remains strong.
Imports jumped 28.4 percent year-on-year to reach 144.11 billion U.S. dollars in May, up from April's increase of 21.8 percent, the General Administration of Customs (GAC) said on Friday.
Imports of iron ore jumped 8.1 percent from a year ago to hit 280 million metric tons for the first five months of this year, while imports of crude oil increased 11.3 percent to 106.51 million metric tons.
Soybean imports soared to 4.56 million metric tons in May, the second highest amount recorded this year.
Import data showed that domestic demand remains strong, which may cushion the risk of a sharp economic slowdown this year, said Australia and New Zealand Banking Group (ANZ) economist Liu Ligang.
The Chinese government has made controlling inflation its top priority this year as it fights to cool down the country's overheated economy.
The manufacturing sector's Purchasing Managers Index (PMI)r, which gauges manufacturing activity, dropped 0.9 percentage points month-on-month to hit 52 percent in May, falling to a nine-month low amid the government's efforts to curb soaring prices.
Peng Wensheng, an economist with the China International Capital Corporation (CICC), said a sharp slowdown is not expected, as overseas demand is not likely to shrink to the levels seen during the global financial crisis.
Despite the optimism of economists, export growth slowed to 19.4 percent in May, bringing in 157.16 billion U.S. dollars. This figure is down from April's 29.9 percent increase.
Exports to the United States grew by 7.2 percent, lower than April's 25 percent increase. Exports to the EU rose 13.2 percent, down from 27 percent in April.
"Developed nations have recovered more slowly than expected, which means that China's export growth may continue to decelerate in the coming months," said Liu Ligang.
Federal Reserve Chairman Ben Bernanke admitted that U.S. economic growth has been "somewhat slower than expected." Bernanke made the comment during a banking conference in Atlanta on Tuesday.
Chinese goods, however, are still competitively priced, so the possibility of a drastic brake on exports is slim, Liu said.
The gradual appreciation of the yuan has also helped to boost imports and dampen exports.
China's trade surplus climbed in May to 13.05 billion U.S. dollars, up from 11.43 billion U.S. dollars in April.
Overall, the trade surplus decreased by 35.1 percent year-on-year to reach 22.97 billion U.S. dollars for the first five months of this year.
Although the trade surplus data was less encouraging than expected, Liu said the yuan will continue to advance, as the central bank is expected to widen the yuan's daily trading band during June and July.
The EU remains China's biggest trading partner, with 218.01 billion U.S. dollars in trade for the first five months of this year, up 22.9 percent year-on-year.
Trade with the United States climbed by 22.3 percent to 169.52 billion dollars during the same period, while trade with ASEAN (Association of Southeast Asian Nations) member states jumped 26 percent to 140.82 billion U.S. dollars.
A commerce ministry official said the data suggests that the nation's foreign trade is trending upwards, although conditions have been complicated by high unemployment in the United States and European countries and political volatility in North Africa and the Middle East.
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