China Boosts Exports to 7.6% in May Amidst US, Europe Tightening Chinese Import Tariffs

• Sommana Yan
• 17 June 2024
• International News
• 1773 Views

China’s exports jumped by 7.6% year-on-year in May, providing a crucial boost to the world’s second-largest economy amid ongoing property market woes and subdued domestic demand. This significant rise, reported by the country’s customs office on Friday, outpaced April’s 1.5% increase and exceeded economists’ expectations of a 6.0% growth, according to Nikkei Asia on 7 June 2024.

Imports, on the other hand, grew by a modest 1.8% in May, down from an 8.4% surge in April, and fell short of the 4.2% gain predicted by a Reuters poll. The robust export performance was partly attributed to a low base effect and led by high-tech products such as integrated circuits, which saw a 28.5% increase in value. Car exports also remained strong at US$10.5 billion, with a rise in the number of units shipped despite a slight decrease in average prices.

The surge in exports comes amidst rising global trade tensions. The U.S. recently increased tariffs on Chinese electric vehicles, solar panels, semiconductors, and certain steel and aluminium products, while the European Union is set to impose new duties on Chinese electric vehicles soon. Latin American countries like Mexico, Chile, and Brazil have also raised tariffs on Chinese steel.

Despite these challenges, China’s manufacturing sector showed resilience. Zichun Huang, a China economist at Capital Economics, noted that “export values rose [year on year] at the fastest pace since April 2023, with export volumes also picking up.”

Huang added that “new tariffs are unlikely to immediately threaten exports, and they might even spur short-term increases as companies expedite shipments to avoid duties. Capital Economics now anticipates double-digit growth in export volumes for 2024, projecting a 5.5% GDP growth for China this year, up from an earlier forecast of 5.0%.”

Imports were impacted by a 13.6% decline in agricultural product values. However, imports from South Korea and Taiwan showed significant growth, while those from the U.S. fell by 7.8%. Notably, imports from Brazil dropped by 17.7% in May after a 20.7% increase in April. Exports to Brazil and the ASEAN region led the growth, surging by 48.9% and 22.5%, respectively.

China’s trade surplus widened to US$82.62 billion in May, up from US$72.35 billion in April. Over the first five months of 2024, exports rose by 2.7% while imports increased by 2.9%, reflecting the ongoing shifts in global trade dynamics.

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