Driven by pandemic, China’s trade looks bleak in May

Beijing | Exports in decline and imports at the lowest for 4 years: China released gloomy figures for its trade on Sunday in May, at a time when the coronavirus pandemic is paralyzing the world economy.

China, the first country affected by the Covid-19 disease, saw its exports in the red last month (-3.3% year on year), according to figures published by the Customs.

In April, exports had experienced a surprise rebound (+ 3.5%), after three months of decline.

This increase was largely attributed to a catch-up phenomenon, after the difficulties encountered by exporters in the first quarter. The containment measures linked to the epidemic had greatly disrupted transport.

Activity has since largely resumed, but companies are struggling to fill their order books when their main customers, in Europe and North America, are in turn paralyzed by the virus.

“This will continue to weigh on exports in June and July,” warns analyst Rajiv Biswas of the firm IHS Markit.

“But they should recover during the second half” at the time of deconfinement in Europe “and the Christmas period”, usually conducive to orders, said AFP Mr. Biswas.

Medical products, of which China remains the main supplier, remain in high demand abroad.

The Asian giant exported 70.6 billion masks to the world between March and May, according to a figure announced Sunday by Beijing at a press conference devoted to the epidemic.

Analysts, however, expect demand to subside as health conditions improve around the world.

Uncertainties and slow recovery

For their part, the Asian giant’s imports plunged again in May (-16.7% year on year after -14.2% in April).

It was the worst performance since January 2016.

This fall in imports, for the fifth consecutive month, is more pronounced than the estimates of analysts consulted by the financial agency Bloomberg (-7.8%).

“This reflects the slow recovery” in China, said Biswas, as the world’s second largest economy was almost shut down from the end of January due to the epidemic.

The companies have undoubtedly also reduced their imports in the face of the uncertainties which weigh on the demand, judges the economist Iris Pang, of the bank ING.

To support a struggling economy and encourage consumption, several provinces or municipalities have launched commercial operations with coupons or coupons.

The city of Beijing started distributing coupons worth a total of 12.2 billion yuan (1.5 billion euros) on Saturday to boost the purchasing power of its residents.

As a logical consequence of the drop in imports, China’s trade surplus increased in May to $ 62.9 billion (against 45.3 billion the previous month).

Unpublished fact, the country gave up last month setting a growth target for this year.

“Our country will face certain factors that are difficult to predict” because of the new coronavirus pandemic and the global situation, had justified Chinese Premier Li Keqiang at the opening of the annual session of Parliament.

Mr. Li announced for 2000 billion yuan (256 billion euros) of measures (increase in the budget deficit, State borrowing) in particular to support employment.

For the first time in its history, the Chinese economy fell in the first quarter (-6.8%), under the effect of the virus.

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