China's exports fall in May due to lack of global demand
China's exports contracted faster than expected in May, while imports slumped, raising doubts about a fragile economic recovery, especially from developed markets, with a grim outlook for global demand.
The world's second-largest economy grew faster than expected in the first quarter, thanks to stronger services consumption and a backlog of orders after years of COVID disruptions, but rising interest rates in the United States and Europe and inflation on demand Due to this, factory production has slowed down.
Exports fell 7.5% year-on-year in May, data from China's customs bureau showed on Wednesday, much larger than the forecast 0.4% drop and the biggest drop since January. Imports declined 4.5%, which was slower than the expected 8.0% decline and April's 7.9% decline.
"Weak exports confirm that China needs to rely on domestic demand as the global economy slows," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. "There is more pressure on the government to boost domestic consumption in the rest of the year, as global demand is likely to weaken further in the second half."
"Looking ahead, we expect exports to fall further before leveling off later this year," said Julian Evans-Pritchard, head of China economics at Capital Economics. "Although interest rates outside China peaked, the backward effect from the sharp rate hike is set to weaken activity in advanced economies later this year, in most cases triggering a mild recession."
