China trade balance for May: $ 35.92bn

  • expected is (updated to) +$22.60bn, prior was -$18.45bn

Exports for May: +7.0% y/y

  • expected is (updated to) +6.7%, prior was +0.9%

Imports for May: -1.6% y/y

  • expected +6.0%, prior was +0.8%

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I had this listed for Saturday … but here it is on Sunday instead!

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Westpac note to clients:

  • The trade surplus widened to $US35.9bn in May from $US18.5bn in April and $US20.6bn a year ago.
  • The in-month outcome is by far the largest for May on record
  • Despite the larger in-month outcome, the surplus is still down by 16% year to date on the first five months of 2013, implying that more needs to be done to reduce the large net export drag recorded in Q1.
  • Export growth rebounded to 7%yr in May from 0.9%yr in April and -6.6%yr in March, roughly as expected.
  • China’s exports ex Hong Kong and Taiwan were already expanding around the 6-7% pace in April, and that is amount where we intuit underlying growth is at present, given the still evident distortions from the invoicing situation of 2012/13.
  • Import growth went in the opposite direction to exports, as opposed to expectations of a symmetric pick-up, moving from 0.9%yr to -1.5%. This is not as weak as it looks: May 2013 was a strong month for seasonally adjusted imports, so the threshold for holding the y/y rate steady was high.
    The respective 3mmas are now X: +0.4%yr and M: -4.0%yr.
  • As of 1pm PRC time, detailed commodity and country information has not been released, so there is nothing more to be said until that data comes to hand.

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Reuters (subscription):

  • China’s imports of major commodities fell in May from the previous month … “Stricter bank requirements for trade loans have dented import orders to some degree. High stocks and a poor import arbitrage also kept buyers away,” said Lian Zheng, a base metals analyst at Xinhu Futures.

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And …

More at Reuters (web):

  • China’s exports gained steam in May thanks to firmer global demand, data showed on Sunday, but an unexpected fall in imports signalled weaker domestic demand that could continue to weigh on the world’s second-largest economy.

And Bloomberg:

China’s exports rose more than analysts estimated in May, helping to cushion a slowdown in the world’s second-biggest economy as an unexpected slump in imports highlights the risks to growth.

Wall Street Journal (gated):

“Continued subdued import growth seems to reflect slow growth of demand in China’s economy,” said Louis Kuijs of Royal Bank of Scotland in a note to clients.