China Foreign Trade Growth Rebounds in May

BEIJING, June 10 (Xinhua) -- China's foreign trade growth trumped market forecasts to post double-digit rates in May, boosted by slightly-improved external markets and more working days in the month.

China's foreign trade rose 14.1 percent year on year to 343.58 billion U.S. dollars in May, rebounding from the 2.7-percent growth registered in April, data with the General Administration of Customs (GAC) showed Sunday.

The figure replaced the monthly trade record set in November 2011, when foreign trade amounted to 334.11 billion U.S. dollars, the GAC said.

Both imports and exports reached record highs in May, with exports climbing 15.3 percent from a year earlier to 181.14 billion U.S. dollars, and imports rising 12.7 percent to 162.44 billion U.S. dollars.

In May, the trade surplus hit 18.7 billion U.S. dollars, slightly higher than the 18.42 billion U.S. dollars seen in April.

The better-than-expected data showed China's foreign trade has stepped out of its previous low times, said Huo Jianguo, director of the Chinese Academy of International Trade and Economic Cooperation under the Ministry of Commerce.

But the country should still be cautious about the long-term trend, Huo said, citing uncertainties with the Eurozone debt crisis.

The persistent fall in foreign trade, one of China's three key drivers, has dragged down growth in the world's second-largest economy. China's first-quarter GDP growth slowed to an almost three-year low of 8.1 percent.

The data have added a touch of brightness to the lackluster economic data released Saturday, which showed barely any improvement in investment and consumption, the country's other two economic drivers.

The double-digit nominal expansion was partly fueled by more working days in May, said Zhao Jinping, deputy head of the foreign economic research department under the Development Research Center of the State Council.

The three-day Labor Day holiday, which was all in May last year, had two days in April this year.

After seasonal adjustments, the annual foreign trade growth slowed to 11.1 percent in May, CAC data showed.

Huo said improving markets in the United States and Japan, stable growth in emerging economies, as well as less pressure for the yuan to rise further also helped boost May's trade data.

Trade growth in June will stay at the current level, he said, stating that China is likely to achieve its foreign trade target this year as along as the Eurozone situation remains stable.

China has targeted an annual rise of around 10 percent in foreign trade this year, compared to 22.5 percent last year.

However, some analysts warned that the rebound may not be able to last.

"It's still unclear whether the whole trend has changed or not, since the year's trade situation has been in fluctuation," Zhao said.

China registered 7.1-percent and 7.3-percent growth in foreign trade in March and the January-February period, respectively, and trade in January dropped 7.8 percent year-on-year.

Zhang Yansheng, director of the Institute for International Economics Research under the National Development and Reform Commission, said as a lagging indicator, trade data usually reflect situations three to six months prior, and are susceptible to seasonal and base factors.

The U.S. is showing signs of recovery, but the nation, together with the Eurozone economies, will be stuck in a state of slacking demand and weak confidence for a long time, Zhang said.

Domestically, China is set to brace for rising costs in production means such as labor and land, which will pare its product competitiveness, he added.

In the first five months of the year, China's foreign trade rose 7.7 percent year on year to 1.51 trillion U.S. dollars, with exports and imports up 8.7 percent and 6.7 percent, respectively, to 774.4 billion U.S. dollars and 736.49 billion U.S. dollars.

China saw a trade surplus of 37.91 billion U.S. dollars during the January-May period, the GAC said.

The European Union remained China's largest trading partner in the first five months despite the lingering debt crisis. Bilateral trade growth rebounded slightly, up 1.3 percent to 220.82 billion U.S. dollars, compared to the 0.3 percent logged in the first four months.

During the period, China's trade with the U.S. -- its second-largest trade partner -- reached 190 billion U.S. dollars, up 12 percent year on year, faster than the 9.2-percent growth registered in the first four months.

The 10-member Association of Southeast Asian Nations (ASEAN) held its position as China's third-largest trade partner, with China-ASEAN trade amounting to 153.74 billion U.S. dollars, up 9.2 percent year on year.

Bilateral trade between China and Japan, which is still recovering from last year's devastating tsunami and massive earthquake, increased 0.4 percent from a year earlier to 134.71 billion U.S. dollars.

China saw robust trade with Russia, which joined the World Trade Organization this year, and Brazil, a major exporter of iron ore and other raw materials. Trade with Russia and Brazil surged 24.4 percent and 10.9 percent, respectively, to 36.3 billion U.S. dollars and 33.23 billion U.S. dollars.