(Bloomberg) — China’s exports climbed more than expected in May, boosting hopes that the world’s second-biggest economy can maintain its momentum by relying on foreign markets.
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Exports rose 7.6% in dollar terms from a year earlier, while imports increased 1.8%, the customs administration said Friday. That left a trade surplus of $82.6 billion for the month. Economists had forecast that exports would expand by 5.7% and imports by 4.3%.
Beijing is relying on sales abroad to offset weak consumer spending at home, where a real estate slump has led households to tighten their belts. Friday’s numbers indicate that the strategy is paying off so far this year, helped by strong global demand that’s provided a tailwind for other Asian trading nations too. South Korean exports hit the highest in almost two years in May, led by semiconductor sales.
Still, Chinese firms face obstacles that don’t exist for many of their peers, which could make it harder to keep growth humming by relying on the export engine. In high-tech industries like electric vehicles, for example, advanced economies including the US and European Union are erecting trade barriers.
That hasn’t hit China’s auto exports yet. The value of sales abroad in May was the second-highest on record, down only slightly from April’s $10.7 billion, Friday’s data showed. But the large European market is about to get harder to access, with new tariffs on Chinese EVs expected next month.
Steel exports posted their second-highest monthly total since 2016 when measured by volume, with 9.6 million tons exported last month. The value of shipments continued to decline along with the average price.
Weak domestic demand has encouraged many Chinese producers to look abroad for markets, including in industries like steel that lost customers at home when the housing bubble burst and construction stalled.
That shift has boosted exports of lower-value goods, in addition to the high-tech industries that are Beijing’s priority. It also threatens to generate a new backlash from trade partners, including emerging-market economies as well as developed ones, seeking to protect their own industries.
Chinese equities largely held on to their earlier losses after the trade data. The onshore benchmark CSI 300 Index lost 0.7% as of the midday break, while a gauge of Chinese stocks listed in Hong Kong was down as much as 0.9%.
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