China Export Growth

China’s trade surplus has narrowed, as in the month of May exports had accelerated above expectations, as the threat of the US slowdown and the appreciation of the Yuan have not affected exports.

Despite the increase in exports, the level of trade surplus is still high as the trade surplus was $20.2bn compared to $22.45bn last year as imports have increased by 40% year-on-year.

In the same period, exports to the US accelerated, even though there was a 10 percent rise in the yuan against the dollar, as exports rose by 9.1 percent in the first five months compared to last year.

The central bank has been proved right with the notion that inflation is a bigger threat than weakening global demand as raw-material costs increased by 40 percent and surging prices in iron ore, crude oil, oil products, coal and soybeans meant that imports rose for the first time in four years.

Although the central bank warned earlier this month that exaggerating the risk of weakening global demand would make it harder for China to recover.

The stability of the economy has also come to the fore as growth of 10.6 percent was experienced in the first quarter.

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