China’s exports likely rebound in May – Reuters poll

China’s export sector is expected to show continued momentum in May, according to a Reuters poll released on Wednesday. This positive outlook offers a glimmer of hope for policymakers navigating a complex economic recovery with numerous challenges at home.

A median forecast from 32 economists predicts a 6.0 per cent year-on-year increase in outbound shipments for May, building on April’s modest 1.5 per cent growth. This potential acceleration is attributed to improving overseas demand.

While imports are likely to see a slower pace of growth. The median estimate suggests a 4.2 per cent year-on-year increase in imports for May, down from April’s 8.4 per cent gain. Official trade data will be released on Friday.

Recent economic data shows a mixed recovery in China’s $18.6 trillion economy. While first-quarter growth exceeded expectations and exports and output improved in March, weak domestic consumption is a concern.

The property crisis, deflation, and potential tariffs from the US and EU are key obstacles to a full economic revival.

“Global demand is giving a bigger boost to China’s economy than we had anticipated this year and foreign tariffs will make little difference to aggregate export performance in the near term,” noted Julian Evans-Pritchard, Head of China Economics at Capital Economics.

The International Monetary Fund (IMF) also recently adjusted its growth projections for China upward. Last week, the IMF revised its 2024 and 2025 forecasts by 0.4 percentage points each, to five per cent and 4.5 per cent respectively.