China’s exports surge in May, boosted by Asean, but US and EU tariff headwinds cloud outlook

China’s exports beat expectations in May, but looming import tariffs from the United States and European Union are set to weigh on the outlook

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Beijing is eager to strengthen China’s exports amid sluggish domestic demand. Photo: Xinhua

Published: 8:00pm, 7 Jun 2024

China’s exports remain under increasing pressure from intensifying trade frictions and looming tariffs from the United States and European Union, analysts said, despite shipments having accelerated in May for a second consecutive month – partly due to a surge in demand from Southeast Asia.

Exports beat expectations and rose by 7.6 per cent from a year earlier to US$302.4 billion in May, the highest monthly export value since September, according to customs data released on Friday. The year-on-year figure was also better than the increase of 1.5 per cent in April.

The quick uptick in growth was partly due to a lower base in the same month last year, when China reported a steep export decline of 7.5 per cent year on year, but exports to the Association of Southeast Asian Nations (Asean) also rose by 22.5 per cent in May, hitting the highest monthly growth since March 2023.

Junyu Tan, a regional economist for North Asia with credit insurance company Coface, said China’s exports in May expanded due to a lower base from the previous year, while shipments of cars, ships and electronics “remained solid”.

“This month’s export data shows strong performance, continuing the robust export trend seen over the past four months, and China’s economy is primarily driven by exports,” said Gary Ng, senior economist at Natixis Corporate and Investment Bank.

“The rapid growth in exports to Asean is mainly benefiting from the shift in the industrial chain, with most of these products ultimately destined for the United States.”