China’s trade surplus dips as exports, imports lift

June 12, 2008

June 12th (China View) – China’s trade surplus in May dropped 9.9 percent from a year earlier to US$20.2 billion after both export and import growth accelerated, the General Administration of Customs said Wednesday.

    Exports increased 28.1 percent last month to US$120.5 billion, compared to growth of 21.8 percent a month earlier, while imports climbed 40 percent to US$100.3 billion, roaring past the 26.3-percent April growth.

    “Thanks to many companies’ swift shift to higher-value-added products and stronger demand for low-priced products under a battered world economy, China delivered strong export growth in May,” said Zhu Jianfang, an analyst with CITIC Securities Co.

    Stephen Green, an economist with Standard Chartered Bank (China) Ltd, said the nation is benefiting from its yuan, which is appreciating against the United States dollar, the currency in which oil and other raw materials are priced.

    “China is gaining buying power and the accelerating export growth that suggests the notion that China’s exports are collapsing is wrong,” said Green. “The faster expansion of imports is partly due to higher prices of crude oil and iron ore on the global market.”

    The yuan has risen 19 percent since China dropped the peg to the greenback in July 2005. It has gained 5.3 percent so far this year, compared to an overall 7-percent increase last year.

    The mechanical and electrical-equipment sector was the star performer among exporters. In the first five months, sales in the sector jumped 26.1 percent to US$320.5 billion, accounting for 58.8 percent of the total products sold abroad.

    In imports, the purchase value of primary products rocketed 69.4 percent due to higher costs. For example, the average import price of crude oil swelled 64.1 percent to US$689.9 per ton, while the volume of imported crude oil rose 12.7 percent to 75.9 million tons.

    The overall trade value in May grew 33.2 percent to US$220.8 billion. It sent the nation’s trade figure in the first five months this year to US$1.01 trillion, a growth of 26.2 percent.

    The trade surplus through May cooled 8.6 percent from a year earlier to US$78 billion.

    During the first five months, the European Union remained China’s largest trading partner with bilateral sales of US$166 billion, advancing 27.9 percent. It was followed by the US and Japan, whose bilateral trade value rose to US$130.5 billion and US$106.5 billion respectively.

    Emerging markets posted much faster growth in trade with China. India’s bilateral trade has surged 70.3 percent so far this year to US$24.2 billion.

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