China’s Exports Surge 7.6% in May, Beating Expectations Despite US Trade Tensions

By Trisha Andrada

Jun 08 2024, 07:36 AM EDT

China's export growth picked up in May faster than in over a year despite US trade tensions, according to customs data released on Friday, June 7.

The South China Morning Post, citing the data, reported that the positive development was driven by soaring demand from Southeast Asia and a lower base effect.

China’s Exports Surge 7.6% in May, Beating Expectations Despite US Trade Tensions — China's export growth picked up in May despite US trade tensions, according to customs data. STR/AFP via Getty Images

China May Exports Climb 7.6% to $302.4 Billion

Beijing has a good chance of reaching its yearly growth goal, as exports increased 7.6% year-on-year to $302.4 billion in May, the largest monthly export value since last September.

The May result was reportedly better than both the 1.5% gain in April and the 6.35% increase predicted by Wind, a Chinese financial data firm. The analysts at Capital Economics believed that exports will continue to be robust in the coming months, even if Western tariffs are being expanded.

According to them, foreign import taxes are not going to have much of an impact on exports right away. Enterprises may even increase exports somewhat as they try to avoid the levies by shipping more quickly.

Redirecting trade and adjusting the exchange rate may also lessen the effect of tariffs, even after they are in place. Part of the reason for the rapid increase in export growth in May was a lower base from the same month last year when China recorded a sharp 7.5% year-on-year decrease in exports.

With a 22.5% increase in May, China's exports to Southeast Asian nations reached its greatest monthly growth rate since March 2023. According to the latest export data, car shipments grew 16.63% in May compared to a year earlier, while ship exports jumped 57.1%.

Integrated circuit exports surged 28.47%, and hi-tech product shipments rose 8.1%. China's trade surplus was $82.6 billion in May, up from $72.4 billion in April.

China May Imports Are Lower Compared to April

Export growth in China dropped last year for the first time in seven years, but overseas demand is increasing this year. May was a lousy month for imports. After an 8.4% growth in April, imports only increased 1.8% last month.

Analysts at Capital Economics said that indicated that import volumes were relatively stable. Still, they anticipated a rise in the months ahead. Government bond issuance hit a seven-month high in May, signaling a new wave of fiscal assistance. That is expected to boost construction activity and, in turn, drive up demand for industrial goods.