China's trade surplus surged as exports fell less than expected in May, boosted by sales of medical supplies, while a sharp fall in imports indicated pressure on manufacturers.
Overseas shipments in May fell 3.3% from a year earlier, beating economists’ expectations. A Reuters poll had forecast a 7% drop.
Exports were helped to an extent by sales of medical supplies including masks as countries look to stem the spread of the coronavirus.
Imports fell 16.7% compared with a year earlier, marking the sharpest decline since January 2016. Reuters said its poll had forecast a drop of 9.7%.
“Imports were affected by insufficient domestic demand and commodity price declines," said Wang Jun, chief economist of Zhongyuan Bank.
China posted a record trade surplus of $62.93bn, the highest since Reuters started tracking the series in 1981, and far exceeding the poll's forecast for a $39bn surplus.
Exports to the US fell 1.2% from a year earlier, while those to India slumped 51% and Brazil’s were down 26%, Bloomberg reported. Imports were down 13.5% from the US, 43.5% from Hong Kong and 29% from the European Union.
The gradual recovery of China’s economy could be in jeopardy amid the risk of an escalation in US-China tensions. Most recently, a US senator accused China of trying to block the development of a vaccine in the West.
Chinese officials have released a lengthy report on the nation’s response to the coronavirus pandemic, defending their government’s actions and saying China provided information in a timely and transparent manner.